Mobile app startup Fetch Rewards has scooped up $8 million in new venture funding to try and expand its grocery shopping rewards business.
The Madison, WI-based company’s latest equity financing was disclosed in a document filed with the SEC this week. Fetch CEO and co-founder Wes Schroll couldn’t be immediately reached for comment Friday afternoon.
Fetch has raised at least $24.1 million in equity funding to date, according to SEC filings. Its earlier backers include Loeb Enterprises and Great Oaks Venture Capital, both based in New York. Fetch last raised capital in September 2017: a $9.6 million funding round that marked one of Wisconsin’s largest startup investments last year.
Four-year-old Fetch’s first product was a smartphone app that enabled consumers to scan grocery items’ barcodes as they shopped, and earn discounts at checkout. The app not only aimed to help shoppers save money, but also streamline the checkout process. According to a Forbes article from August 2017, the system was available to shoppers at roughly 50 stores at that time, with another 120-plus stores planning to begin offering it in fall 2017.
But since then, Fetch appears to have phased out that product in order to focus on a second app that it introduced last year. The newer app lets grocery shoppers scan paper receipts and earn points that can be redeemed for gift cards at retailers such as Amazon (NASDAQ: AMZN), Macy’s (NYSE: M), and Sephora. Points are awarded when users purchase eligible products sold by one of the dozens of brands that Fetch works with, which sell everything from potato chips to body spray to beer. The startup claims that the program works with receipts from any grocery store, convenience shop, drug store, club store, or liquor store.
The rewards app puts Fetch in competition with other free apps such as ReceiptPal and Ibotta. We’ll update this story if Fetch shares why it scrapped its original app to focus exclusively on the newer one, but one possibility is that it might be easier to scale the business. The first app required forming partnerships with grocery stores, and launching the system involved setting up a special checkout lane for Fetch users. The rewards app doesn’t require that infrastructure or close relationship with each store. Fetch says the newer app is compatible with any store because the company works directly with brands to offer users the rewards.
Furthermore, the business model change means Fetch won’t be competing with much bigger companies working to revamp the in-store shopping and checkout experience—including Amazon and Walmart (NYSE: WMT).