ShopBack posts 150% revenue growth, earns 3x return on Seedly investment

After raising capital last year amid an ecommerce boom fueled by Covid-19, ShopBack is on the hunt for even more funding.

Photo credit: ShopBack

According to data from VentureCap Insights, the cashback rewards platform has already raised an initial US$7.3 million as part of an ongoing round from existing backers Marsela, Chunghwa Pochome Fund, and Dynasty Kingdom Investment. The fresh capital injection has taken ShopBack’s valuation to US$506 million from US$360 million previously.

The startup’s robust financial results in the last financial year may be what has bolstered investors’ confidence in the firm.

In the financial year ended March 2020 (FYE 2020), ShopBack’s revenue grew over 150% to hit US$75.8 million, compared with the US$28.4 million the company logged in an extended FYE 2019, as per its filings.

Most of the firm’s revenue growth was driven by the company’s commission income, which is recognized when customers make a purchase with a merchant via ShopBack’s rewards platform. Commissions made up the overwhelming majority of the platform’s revenue in FYE 2020, a trend that carried over from the previous year.

Besides revenue from commissions, ShopBack’s advertising income also climbed over 5x to US$2.6 million in FYE 2020, year-on-year. This kind of revenue is generated from media assets leased out to merchants for advertising purposes on its platform.

In addition, ShopBack received a nearly 3x return on investment on the sale of its subsidiary, Seedly, which runs a popular online community devoted to personal finance.

Filings show that the cashback firm sold the unit in October last year in a deal that included a cash component of just over US$4 million and shares in CompareAsia Group worth roughly US$1.8 million. Around two years prior to the sale, ShopBack had acquired Seedly for around US$2.1 million.

However, any benefits from the sale will only be reflected in ShopBack’s FYE 2021 financial statements as the deal took place after the close of the 2020 fiscal year.

See also: Why Seedly is moving on from ShopBack and joining CompareAsiaGroup

ShopBack did not respond to Tech in Asia’s request for comments related to its financials.

Operating losses double

On the flip side, ShopBack’s operating loss widened by nearly 2x to US$38 million in FYE 2020 from US$19.7 million a year ago. This figure excludes any gains or losses from a non-cash item under “net finance income or costs” during both years. The company’s cash and cash equivalents, which includes fixed deposits and money in the bank or on hand, grew by 65.5% to US$55.6 million in FYE 2020.

A shuffle in strategy amid Covid-19