TrackIF, a free service that allows users to track their favorite products on the web, has a plan to bring business back to online retailers, while clearing out shoppers' inboxes at the same time.
Earlier today, the Minneapolis, Minn.-based company announced that it raised $5 million in a Series A funding round co-led by Origin Ventures and Grotech Ventures. The addition of this funding brings the total amount raised to nearly $10 million, TrackIF shares exclusively with Inc. Chicago Ventures also contributed to this round (around $500,000.)
Billing itself as "Pinterest meets Google Alerts," TrackIF deploys an algorithm that sends users key updates from major retailers. One example of an update would be when a price on an item has dropped significantly, or when the item is back in stock.
The service is a convenient way for a users to get the biggest bang for their buck, while e-commerce sites can make up thousands in otherwise lost revenue by shifting their strategy to reflect what customers say they're most willing to buy (and when.)
Doug Berg, TrackIF's founder and "chief tracker," says that unlike some platforms, which leverage cookies and other tracking devices that amp up the "creep factor," users opt in to use TrackIF themselves.
"I've done the Sand Hill road circuit," says Berg, a serial entrepreneur whose previous venture, Jobs2Web, was acquired by SAP in 2011 for slightly over $110 million. This time around, he pitched to Origin and Grotech because the company wanted to target those who had a vertical understanding of the retail and niche marketing areas.
Today, the company (which launched in 2013, and began selling in March of 2014) counts 20 major retail partners, including CostPlus, Neiman Marcus, and Home Away. Berg wouldn't disclose the name of his top client, but reveals that it is the "the largest home improvement retailer" out there (if we read between the lines, one might safety assume: Home Depot).
Berg notes that Home Depot is capturing as much as $1 million every day in lost revenue. It does this by harnessing TrackIF's shopper data to better inform its sales strategy.
Overall, Berg estimates that sites are reclaiming around 10 to 30 percent more revenue per customer, with around 10 percent of their total shoppers opting to use the tracking service within their first year. That translates into millions of customers overall.
To bring in its own sales, TrackIF charges retailers a click fee (between 25 cents and $4,) depending on the price of a product or the site's volume. "They pay us like they pay Google or Facebook for retargeting," Berg explains. For the shopper, the service is free.
Online retailers were a ripe market opportunity for Berg, who notes that sites are often getting as little as 1 percent back on open rates, and even less on click back, as users grow "dazed," or wary, of their email notifications.
Still, those retailers pose a unique set of challenges for a nascent software company: "They've got so many priorities and only a few of the major retailers have hundreds of developers," Berg says. "Trying to get them to look at something new...has been our single greatest challenge." Because of this, TrackIF worked hard to perfect its algorithm before going to market, such that retailers would have to do virtually nothing once they agree to work in partnership with the company.
With the new capital, Berg hopes to entice the top 200 U.S. retailers onto the platform. Even so, he says that he's avoiding the "giants," namely, Amazon.
"Our sweet spot in the market is to go after those retailers that are big enough that they need this, but not so big that they would just take the ideas and run with them," he adds.