When the founding team at startup Flipp set out to redefine the internet search experience for shopping, they quickly ran into a retail tactic that’s still going strong after decades: the circular.
Inserted into a newspaper each week or on special occasions, the circular is still one of a retailer’s proven ways to communicate new product lines or sales. “We saw a $15 billion business still stuck in printing paper,” says CEO Wehuns Tan. Flipp ran a study with Nielsen and found that as much as 84% of shoppers surveyed said they still checked a print circular each week. But millennials were looking online. “You don’t really go to the newspaper to get classifieds anymore,” says Tan. “You’ve got Craigslist.”
So Flipp set out to solve the digital circular for the retail sector, signing up 800 retailers including Walmart, Kroger, Macy’s, Lowe’s and Dollar General that reach 50 million shoppers ever week across one billion flyers a year. Shoppers interact with their latest offerings within the Flipp app, which gets them in the door at a cost of about $3 per person; Tan says TV ads will average out to about $8 and print circulars cost $15. It took the Toronto based startup, which Tan cofounded with David Meyers, David Au-Yeung and Matt Cheung. more than four years to build out the relationships with brands as it benefited on word of mouth from predominantly moms to spread awareness among users.
To use some of its marketing chops on itself and grow even more, Flipp’s now employing the help of investors with expertise in digital media. Flipp announced on Thursday that the startup has raised $61 million from growth equity firm General Atlantic, with vice president Zachary Kaplan joining the board. General Atlantic joins venture firm Insight Venture Partners as investors in Flipp, which a source with knowledge of the funding says values the startup in the $400 million range.
“We’ve been involved in news businesses around the world,” says Kaplan, who helped get GA into media companies including BuzzFeed and Vox. “We’ve asked why newspapers at a regional level were still around. And the print circular remained important, it still worked. But now they’re finally moving away from print.”