A new Chicago startup aims to help brands spend less money on Facebook and Instagram ads with its shopping rewards app that helps people earn cash back on purchases they make.
Mavely, founded by Evan Wray, Peggy O'Flaherty and Sean O'Brien, is a shopping app that allows users to find new direct-to-consumer brands and earn an affiliate commission off each purchase. Mavely shoppers can also invite friends to shop on the platform, which also earns them cash back.
Mavely, which just launched in beta mode in April, has more than 100 direct-to-consumer brands on its platform, including Allbirds, BarkBox, Home Chef, Blue Apron and Sun Basket. Wray, the startup's CEO, says Mavely has "thousands" of users earning cash back on the platform.
The incentive for consumers is simple---earn money on purchases you make, and encourage your friends to shop to make even more. For brands, it's a way to acquire customers at a much lower price point than spending on Facebook and Instagram.
"They’re all trying to figure out alternative channels to decrease their six-figure monthly spend on Facebook and Instagram," Wray said in an interview. "It’s getting incredibly expensive to reach customers at any kind of scale on those channels, and it's proving to be a massive problem for the direct-to-consumer retail space in general."
Wray said brands on Mavely are seeing customer acquisition costs at about a third or half of what they are spending on Facebook and Instagram.
Mavely also announced Wednesday that it raised $1 million in funding from PivotNorth Capital, a Silicon Valley VC firm that's invested in companies such as Looker, Chime and Sun Basket.
Wray and O'Brien previously co-founded Swyft Media, the first "emoji ad network" that delivered branded emojis directly to consumers in their messaging apps. It was acquired by publicly traded Monotype Imaging in 2015 for $30 million. The two also founded Irish Beef, a quick service restaurant franchise that was acquired by Equicorp Partners in 2018.
Loyalty programs aren't new to e-commerce, with sites like Rakuten and Ibotta offering users cash back on purchases. And shopping app LIKEtoKNOW.it takes a somewhat similar approach by allowing people to shop by following their favorite influencers. But Mavely's goal is to make the experience even more social by encouraging users to share links to products with their friends, and encouraging their followers to also join the Mavely platform.
Wray said he expects Mavely to reach 30,000 users and 300 brands on the platform by the end of 2019.
"[Direct-to-consumer brands] are all starting to look to alternative solutions to Facebook and Instagram to acquire customers," Wray said. "Instead of all those dollars going to Facebook, we're seeing those dollars actually go into the pockets of families all across the United States."
