Madison unicorn Fetch Rewards raises another $240 million as valuation tops $2.5 billion

Around a year after consumer loyalty app maker Fetch Rewards announced it had raised Series D venture capital financing at a billion-dollar valuation, the Madison-based company announced Thursday it has raised another $240 million in equity and debt to fuel its rapid growth.

The latest round was led by Pennsylvania-based private markets investment firm Hamilton Lane (Nasdaq: HLNE). Fetch Rewards also announced partnerships with, and investments from, Spanish-language media firm TelevisaUnivision Inc. and consumer insights firm NielsenIQ.

To date, Fetch has raised more than $500 million and is valued at more than $2.5 billion, according to the announcement. The company's previous financing round was the largest venture capital deal by a Wisconsin company in 2021 and the latest round could earn Fetch Rewards that distinction again in 2022.

Fetch Rewards will use the new capital to launch a Spanish-language version of its app and increase its penetration in the U.S. market, as well as for employee hiring and additional product investments, CEO and founder Wes Schroll said. The company currently has around 13 million active users and expects to hit more than 30 million in the next couple of years, he added.

"I think everyone believes that we're ... not even close to fully tapped into the potential of where the company can become," Schroll said. "There's just a lot of people who have just still not even heard about Fetch yet."

The startup, which was founded in 2013 and launched its app in 2017, has around 720 employees and will continue to grow that number, albeit at a slower pace than in past years, Schroll said. It's preparing to move into a new headquarters space on Madison's East Washington Avenue this summer, he added.

"We're not going to need to double the employees again," Schroll said. "We're seeing a lot of efficiencies starting to come out."

The free Fetch Rewards app awards points that are redeemable for gift cards and other rewards to users when they upload a photo of any grocery, restaurant or retail receipt. With customer purchase data from the more than $100 billion in annual gross merchandise value it captures, the company has become a marketing platform for brands that want to better understand consumer behavior.

Fetch Rewards is rolling out Fetch Español in order to appeal to U.S. users and in anticipation of a potential global expansion starting in 2023, Schroll said.

"Our consumer base that are actively using the application are very representative of the U.S. and U.S. population, and there are a lot of Spanish-speaking natives," he said. "We need to create a product that feels authentic to everyone, and then that's obviously laying some of the groundwork for us to be able to go and launch in other countries."

Fetch Rewards has for at least the last two years led the state in total venture capital dollars raised and accounted for about a quarter of the total dollars raised by Wisconsin companies last year. In 2021, it raised $210 million to become one of the few Midwest "unicorn" companies with a valuation greater than $1 billion. Wisconsin companies raised a total of around $811 million in total venture capital and angel financing last year, according to the Wisconsin Technology Council.

Other investors in Fetch Rewards' latest fundraising round were Los Angeles-based and Archer Venture Capital and a Yieldstreet fund, as well as continued backing from previous Fetch Rewards investors, according to the announcement.

Fetch Rewards also took on some debt as "a small portion" of the latest financing round to minimize dilution for existing shareholders and because it needs a line of credit to help with some customers' long payment terms, Schroll said. The company is not yet profitable but is getting closer to profitability, he added.