May 13 (Bloomberg) -- Investors are pouring money into online coupons.
Two months after Coupons.com Inc. raised $193.2 million in an initial public offering, Web discount purveyor Swagbucks is tapping institutional investors for the first time. The company said today that it reeled in $60 million from Technology Crossover Ventures.
Swagbucks, which lets consumers win gift cards and other rewards by playing games, taking online surveys and using its search engine, is cashing in on a boom that’s lifted Coupons.com to a $1.32 billion market capitalization and Web couponer RetailMeNot Inc. to $1.79 billion. More than 110 million U.S. adults will use digital coupons this year, up 8.1 percent from 2013, according to EMarketer Inc.
In addition to the new capital, Swagbucks is changing its leadership. The El Segundo, California-based company named former Fandango.com and Shopzilla Inc. Chief Executive Officer Chuck Davis as CEO, replacing founder Josef Gorowitz, who is becoming president. Davis, who also serves as a venture partner at Technology Crossover Ventures, has been the startup’s executive chairman since last year.
“As a founder, I’ve always known there would be a time as we grow as a company that the CEO role would change a little,” said Gorowitz, who was studying to be a rabbi before starting Prodege LLC -- the parent of Swagbucks -- in 2005. He declined to comment on the company’s valuation.
Gorowitz said he was inspired by Google Inc.’s founders, who hired industry veteran Eric Schmidt as CEO in the company’s early, high-growth years.
“Bringing in someone like Schmidt when it was time to take the company to the next level allowed Google to be where Google is today,” he said.
Revenue at Swagbucks increased 51 percent last year to $53 million, and the company said that it’s been profitable since 2010. Swagbucks also competes with Ebates Inc., which picked JPMorgan Chase & Co. to lead its IPO with help from Bank of America Corp., people with knowledge of the deal said in December.
While Coupons.com and RetailMeNot are trading above their IPO prices, the stocks have tumbled in recent weeks along with a broader selloff in technology companies.
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