Every now and then I boast about the next big thing coming from the Nordics and now I believe I have found a seed for one of those monsters.
Social Shopping is one of the fastest growing online consumer markets and there’s a Finnish startup right in the middle. DealDash, a Finnish startup, is making $200k+ a month and has currently 130k+ users, and its growing fast. Their annual revenue run-rate is approaching the $3m mark and sales have doubled in the last 6 months.
DealDash ships out thousands of products every month, however they do not carry an inventory and let their suppliers take care of delivery and fulfillment.
Starts to sound too good. Almost Groupon too good.
DealDash founder and CEO William Wolfram explains to me that the key to success is DealDash’s ability to keep the customer acquisition cost so low while at the same time the market itself is exploding in size.
DealDash combines social gaming with social shopping. You compete against other users to get the best deal. It’s almost like strategy gaming in the world of e-commerce. Having said that, more than half of their current sales come from the backend store where the customers who lose bidding matches can buy the same product at a non-discounted regular price and get a full refund on all the money spent bidding.
The site is still a bit rough to my liking, but after meeting Wolfram I think there’s much more to come if they can drop some of the ‘shopping channel’ look and feel and get closer to game like graphics with the commerce in the middle.
It’s really hard to retain customers in e-commerce because its so price sensitive, but the entertainment aspect will keep the them coming back and loving the experience.
According to Wolfram the company is currently fully focused on North America and hope to become the leading company the market before moving into Europe or Asia.
Given how hot the market is and how well their model works, its not surprising the company is in the middle of closing a financing round to have enough ammunition when the competition starts to build up. Wolfram further explains that even though the model sounds a bit like the other social shopping site like Groupon and LivingSocial, it’s really not. Some of the closest competitors include Bigdeal.com funded by First Round Capital and Mayfield and MadBid funded by Atomico Ventures.
DealDash was founded in 2009 and has offices in Sunnavale, CA and downtown Helsinki, Finland. As so many other Finnish companies they focus on running their R&D from Finland and the commercial end is in the US.
We will closely follow DealDash to see how well they ride the social shopping wave which is starting to resemble a Tsunami.