DealDash filled us in with some exciting numbers that must make the Helsinki/Sunnyvale based “shopping as entertainment” company one of the fastest growing startups coming out of Finland today. CEO William Wolfram tells us during the last 12 months the company has quadrupled its revenue and is operating profitably. And today, DealDash ships more than 10,000 products a month with revenue approaching the 8-figure mark.
These numbers are exciting on their own, but what’s really remarkable about this growth is that it exists in such a crowded market. “We have seen more than 300 companies launch in our space and less than 100 remain today,” said Wolfram, “Our shoppers can go to any other site easily, so creating the best customer experience has been the only way to succeed in this business.” The company also tells us it has been able to finance much of its growth with its own cash flow and is expected to close a financing round in November.
If you’re unfamiliar with DealDash, they’re a penny auction discount shopping website that’s heavy on the game mechanics. Visitors are presented with a page of electronics, gift cards, and luxury goods with countdown timers running quickly down to zero. Bids must be pre-purchased for 60 cents apiece, and each bid raises the auction price for the item by one cent each bid. This makes it possible to get something like a $25 Subway gift card for a couple bucks, plus the additional 60 cents each time you bid on the card.
The game mechanics revolve around the short length of the auction round. Most items are sold if there’s not a new bid within 30 seconds, which mean the countdown timer is constantly in the danger zone. If you don’t bid, some jerk out there is going to get your $50 gift card to Outback Steakhouse for $2.78! Each bidder hopes their round will slip past everyone else.
What separates DealDash from other penny auction websites is that DealDash gives losing bidders the option to buy the item they were bidding for, at a normal fixed retail price and get all the bid-credits lost while bidding refunded back to them for free. They call this option the “Buy it Now” and the company generates 50% of its revenues through it.
The company tells us they see up to 100,000 bids a day, and think the “shopping as entertainment” market will grow to be a $10Bn+ market. CEO William Wolfram tells us, “Our goal was to remove the risk from the bidder while providing an exciting and fun shopping experience. We successfully did so.”