TreatFeed, the startup from HauteLook founders Brett Markinson and Konstantin Glasmacher, has raised $5.4 million in their first financing round. Participating in the financing are amongst others, Norwest Partners (press release).
TreatFeed offers rewards to users in exchange for the sharing they do within their social network which counts as word-of-mouth marketing.
"TreatFeed aggregates deals from retailers allows members earn rewards for sharing deals, and for the ongoing transactions of the people in their network. Users are essentially compensated for sharing in their social graph, or ‘social tree.’ Points can then be redeemed for products, exclusive offers and even converted into cash. TreatFeed makes money from affiliate fees."
Currently the system is understandably geared towards building a user base:
"And the fact that TreatFeed is rewarding people for bringing in more users, rather than for recommending specific deals, seems smart, because it will help the site build out its user base quickly."
Cooperations with publishers are planned:
"And it will work on affiliate programs with publishers, allowing publishers to make money not just on the shoppers who sign up directly from their site, but on the larger SocialTree that builds as those shoppers continue using TreatFeed and bringing in their friends."
What TreatFeed is doing well in comparison to the many other commissions based services is that they avoid a direct cashout but rather use a loyalty point system. This subtle difference helps to separate pure monetary incentive with the users’ appetite to collect points. Both aspects can be driven and controlled separately.
The TreatFeed founders had most recently sold Hautelook and the shoe club SoleSociety to Nordstrom for $270 million. Under the umbrella of Lagovent, they are running an incubator for new e-commerce business models out of Los Angeles.
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- From Social Shopping to Personal Shopping Network
- How Woot! Is Working With Blippy, The Twitter For Purchases
Originally posted in German by Marcel Weiss and Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
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