Today San Francisco-based Referly announced it has closed $1 million in seed funding for its referral-driven shopping platform, from investors including New Enterprise Associates, Ignition Partners, 500 Startups, as well as several angel investors. The site lets users earn commission by building their own storefronts through curating and endorsing the products, either on the site or through sharing their own referral links online. BetaKit covered the company when it first launched its API for merchants while taking part in the Y Combinator startup accelerator program.
The company saw visitors to its website grow to 100,000 shoppers in September and has almost 14,000 users creating their own curated storefronts. The company will use the funding to grow its team and invest in marketing and product development efforts.
“What makes us unique is that we let people sell in our marketplace, so if you love certain products you can actually create a store for those products without carrying any inventory or having an upfront cost to you, and then if you generate purchases through your refer.ly links or through your store, you get a commission,” CEO and co-founder Danielle Morrill said in an interview. “We’re trying to take all these people who spend a lot of curating collections of products they love, and help them make some money, because they’re basically this massively distributed salesforce who are already generating tons of value.”
Users can link to a product, online service, or app on their storefront, and then share their refer.ly link on popular social networks like Facebook, Twitter, or by email. Once users sign up for the affiliate program they are given instant access to refer products from over 30,000 merchant websites. Their first store ends up being their main profile, but from there they can create their own collection of products which act like specialized stores for things like clothing and electronics. When a shopper clicks on a link, they are directed to the online merchant’s site to make the purchase.
Merchants can integrate with the platform through their existing affiliate marketing program or they can use Referly’s API, which lets them create their rewards program. Rewards can be customized, which Morrill believes is a huge plus for another target market for the site, SaaS-based companies who can reward referrers for getting their friends to sign up.
The amount of commission users of Referly can expect to earn can range from 5-10 percent depending on the merchant and the product or service they refer, with the company pocketing nothing and letting its users keep 100 percent of what they earn. Instead, the company relies on their own curated selection and referrals as an initial form of monetization for its platform.
“It’s more important right now to help our users be really successful, because that’s how it becomes addictive is if you get that email saying ‘hey, you got money in your account’. Reality is, say you sell a product that’s $20, so you get $2, if we take 20 percent of that we’re already reducing a very small number,” Morrill said.
Morrill said the site has a mix of female and male users, which she says sets them apart from curated shopping sites like The Fancy. “We’ve really tried to not be overly focused on fashion. Because the minute you have a site that focuses on fashion it sends a signal to people that its a site for women,” Morrill added. “Generally, we’ve tried to make the site gender agnostic, and focused more on things people already own, so instead of focusing on hipster clothes or high fashion, we focus much more on things you would buy today on Amazon because you need them for your day-to-day life.”
The company is currently focused on online merchants in the U.S. and Europe, and is looking to target the mobile and tablet market with apps in development. With the funding under its belt, Refer.ly is looking to take passive curation of products that so many sites like Pinterest have given rise to and allow everyday individuals be rewarded for their time and effort.