ShopBack, a cashback startup in Asia Pacific, raises $45M from Rakuten and others

ShopBack, a Singapore-based startup that offers cashback and consumer rewards in Asia Pacific, has closed a $45 million round led by new investors Rakuten Capital and EV Growth.

Founded in 2014, the startup had been relatively under-the-radar until late 2017, when it announced a $25 million investment that funded expansion into Australia, among other things. Now, it is doubling down with this deal, which sees participation from another new backer, EDBI, the corporate investment arm of Singapore’s Economic Development Board. ShopBack has now raised close to $85 million from investors, which also include Credit Saison Blue Sky, AppWorks, SoftBank Ventures Korea, Singtel Innov8 and Qualgro.

The investment will see Amit Patel, who leads Rakuten -owned cashback service Ebates, and EV Growth managing partner Willson Cuaca, join the board. Cuaca is a familiar face as his East Ventures firm, which launched EV Growth alongside Yahoo Japan Capital and SMDV last year, was an early investor in ShopBack, while the addition of Patel is potentially very significant for the startup. Indeed, when I previously wrote about ShopBack, I compared the startup directly to Ebates, which was bought by Rakuten for $1 billion in 2014.

Ebates brings operating experience in the cashback space,” Henry Chan, ShopBack co-founder and CEO told TechCrunch in an interview.

“A lot has changed in the last year and a half; Ebates has a very strong focus on the U.S. … given that we’re not competing, it makes sense to partner and to learn,” he added.

The obvious question to ask is whether this deal is a precursor to a potential acquisition.

So, is it?

“It is squarely for learning and for growth,” Chan said in response. “It makes sense for us to partner with someone with the know-how.”

ShopBack operates in seven markets in Asia Pacific — Singapore, Malaysia, the Philippines, Thailand, Taiwan, Australia and Indonesia — with a core rewards service that gives consumers rebates for spending on areas like e-commerce, ride hailing, food delivery, online travel and more. It has moved offline, too, with a new service for discovering and paying for food, which initially launched in Singapore.

ShopBack said it saw a 250 percent growth in sales and orders last year, which translated to nearly $1 billion in sales for its merchant partners. The company previously said it handled $400 million in 2017. It added that it typically handles more than 2.5 million transactions for upwards of seven million users.

(Left to right) Henry Chan, co-founder and CEO of ShopBack, welcomes new board member Amit Patel, CEO of Rakuten-owned Ebates [Image via ShopBack]

Chan said that, since the previous funding round, ShopBack has seen its business in emerging markets like Indonesia, Thailand and the Philippines take off and eclipse its efforts in more developed countries like Singapore. Still, he said, the company benefits from the diversity of the region.

Markets like Singapore and Taiwan, where online spending is more established, allow ShopBack to “learn ahead of time how different industries will develop” as the internet economy matures in Southeast Asia, Chan — who started the company with fellow co-founder Joel Leong — explained.

Outside of Southeast Asia, Chan said that ShopBack’s Australia business — launched nearly one year ago — has been its “most phenomenal market in terms of growth.”

“We’re already superseding incumbents,” he said.

ShopBack claims some 300,000 registered users in Australia, where it said purchases through its platform have grown by 1,300 percent between May 2018 and March 2019. Of course, that’s growth from a tiny initial base, and ShopBack didn’t provide raw figures on sales.

For its next expansion, ShopBack is looking closer to home, with Vietnam its upcoming target. The country is already home to one of its three R&D centers — the other two are located in Singapore and Taiwan — and Chan said the startup is currently hiring for a general manager to head up the soon-to-launch Vietnam business.

Already, though, the company is beginning to think about reaching beyond Asia Pacific. Chan maintained that the company already has a proven playbook — particularly on the tech side — so it “can enter a Western market” if it chooses, but that isn’t likely to happen in the immediate future.

“We could [expand beyond Asia Pacific] but we have a fair bit on our plate, right now,” said Chan with a laugh.

Flying taxis could be more efficient than gas and electric cars on long-distance trips

Flying cars definitely sound cool, but whether they’re actually a good idea is up for debate. Fortunately they do seem to have some surefire benefits, among which you can now count improved efficiency — in theory, and on long trips. But it’s something!

Air travel takes an enormous amount of energy, since you have to lift something heavy into the air and keep it there for a good while. This is often faster but rarely more efficient than ground transportation, which lets gravity do the hard work.

Of course, once an aircraft gets up to altitude, it cruises at high speed with little friction to contend with, and whether you’re going 100 feet or 50 miles you only have to take off once. So University of Michigan researchers thought there might be a sweet spot where taking a flying car might actually save energy. Turns out there is… kind of. The team published their results today in Nature Communications.

The U-M engineers made an efficiency model for both ground transport and for electric vertical take-off and landing (VTOL) aircraft, based on specs from aerospace companies working on them.

“Our model represents general trends in the VTOL space and uses parameters from multiple studies and aircraft designs to specify weight, lift-to-drag ratio and battery-specific energy,” said study co-author Noah Furbush in a U-M news release.

They looked at how these various theoretical vehicles performed when taking various numbers of people various distances, comparing energy consumed.

As you might imagine, flying isn’t very practical for going a mile or two, since you use up all that energy getting to altitude and then have to come right back down. But at the 100-kilometer mark (about 62 miles) things look a little different.

For a 100 km trip, a single passenger in a flying car uses 35 percent less energy than a gas-powered car, but still 28 percent more than an electric vehicle. In fact, the flying car is better than the gas one starting at around 40 km. But it never really catches up with the EVs for efficiency, though it gets close. Do you like charts?

ICEV: Internal combustion engine vehicle; VTOL: Vertical takeoff and landing; BEV: Battery electric vehicle. The vertical axis is emissions.

To make it better, they had to juice the numbers a bit bit, making the assumption that flying taxis would be more likely to operate at full capacity, with a pilot and three passengers, while ground vehicles were unlikely to have their average occupancy of 1.5 people change much. With that in mind, they found that a 100 km trip with three passengers just barely beats the per-person efficiency of EVs.

That may seem like a bit of a thin victory, but keep in mind that the flying car would be making the trip in likely a quarter of the time, unaffected by traffic and other issues. Plus there’s the view.

It’s all theoretical right now, naturally, but studies like this help companies looking to get into this business decide how their service will be organized and marketed. Reality might look a little different from theory, but I’ll take any reality with flying cars.