Investors are hot on coupons. The site is the second of its type to announce whopping success with fundraising in recent months.
Everybody loves a deal—and perhaps nobody more so than investors.
Start-up CouponCabin.com raised a whopping $54 million first round of funding. This is on the heels of Coupons.com's announcement that it pulled in $230 million in two rounds.
The Whiting, Indiana-based company's spin on the standard coupon model is that it verifies—and then continues to update—whether an offer still works. The company says it checks each coupon three times a week, and it takes its work seriously: If a user tries a coupon that turns out no longer to be valid, CouponCabin will hand over a $25 gift card for a retailer, such as Target, Dell, RadioShack, Best Buy, Home Depot, Kohls, or Kmart.
The cash infusion will be put toward building up a consumer base and focusing on coupons for grocery stores and local businesses. (Users can search for coupons by Zip code.)
"Among other initiatives, this investment will enable us to grow our local, grocery and printable coupon offerings, making us the deepest and broadest consumer destination for coupons on the Web," said CouponCabin founder and CEO Scott Kluth in a statement. "This investment will also help us better engage with more than one million fans on Facebook."
CouponCabin's round was led by Baltimore investment fund JMI Equity, which has also invested in online firms such as DoubleClick, Adknowledge, Business.com and DoubleVerify.
Kluth is a former employee of Sears and developed Sears.com, where he studied the science of how and why people interact with websites. He founded CouponCabin in August 2003 with some 150 stores and 1,000 coupons—amid a lot of wariness from major retailers. Since then, the site has grown to more than 3,200 stores and 155,000 coupons—and companies such as Victoria's Secret now send him coupon codes.
Last year, CouponCabin generated $500 million in online retail sales for its wide range of merchants, and it claims to have saved users more than $300 million since 2003. In 2011, the company has posted more than 100,000 offers from more than 3,500 stores. The most popular categories so far this year: department stores, food and wine, and shoes.
The company was founded in Chicago but recently moved to Indiana after the state of Illinois toughened laws on collecting sales tax from online merchants.
Inc. contributing editor COURTNEY RUBIN was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.