An online business which offers cashback deals on consumer electronics and household products founded by internet entrepreneur Adir Shiffman has just taken a stake from private equity group Aura Capital.
The business, StartHere, has already gained significant scale, with brands such as Apple and JB Hi-Fi selling products through the site.
The investment follows Shiffman’s successful ventures in founding financial services comparison website Help Me Choose, which was acquired by Mortgage Choice in 2010.
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He also co-founded consumer experience consultancy Global Reviews, which recently scored $600,000 in a capital raising – also from Aura.
Aura Capital chief executive Calvin Ng said this relationship with Shiffman helped prompt the investment – along with its impressive numbers. StartHere already has 14,000 members and sales worth $5.3 million.
“We’ve worked with Adir in a few different capacities and hold him in great regard. But it’s also a truly scalable business model, and we think it’s very much a global opportunity.”
Shiffman started the business alongside Steve Ford and Simon Szewach in 2010. The business allows users to sign up and shop through various stores, and then receive cashback for whatever they buy.
The model works by having sites pay StartHere a fee when users shop on their sites – this fee is then partly given back to the consumer.
Cashback-based websites have grown popular in offshore markets, particularly in the United States and Asia, and Ng says the team intends to take the company global.
Szewach says the investment was in part due to the global expnasion plans.
“It’s more than just the money, though, it’s also about the experience and the benefits we can get from that.”
He also says customers are attracted to the business as it allows them to shop normally, as opposed to waiting for a specific deal on a group buying or daily deals site.
“The stores also love it because it doesn’t cost them anything, it’s essentially free advertising, and they can cross promote and so on.”
Although the offers range from merchant to merchant, most offer their full product ranges. Szewach also says the company pays customers more quickly than other sites, which establishes a trust connection straight away.
Ng says the business has the ability to scale internationally soon enough.
“It’s a first mover in the Australian space, and it’s growing very rapidly. It’s worked in other countries before, and it’s starting to reveal its success in Asia.”
“It’s pretty much a no-brainer. If you’re already shopping on these stores, you can be better off by between 5-10%.”
While Ng wouldn’t reveal the size of the investment, he did confirm the site now has a seven-figure valuation, and that he will sit on the company’s board.
The money will be used to help with marketing. So far, StartHere says it’s spent virtually nothing on promoting the business.
In a statement, Szewach said the investment will be used to “grow our membership base and on securing the best cashback deals around the world”.
Aura has been more active in the online space during the past year. It spent $600,000 on a capital injection for Global Reviews, and earlier this year spent $133,000 on two home loan-related URLs.