Toronto-based digital flyer company, Flipp, is looking to make over-stuffed mailboxes a thing of the past with funding from New York-based growth equity firm General Atlantic.
The company recently received $61 million in funding from General Atlantic, whose investment portfolio includes Uber, Airbnb, BuzzFeed and Vox Media. General Atlantic becomes a minor shareholder in the nine-year-old company, with vice-president Zachary Kaplan joining its board of directors.
Kaplan said Flipp, founded in 2007 as Wishabi, is “uniquely positioned to disrupt one of the last remaining vestiges of the print advertising world…by providing innovative digital content management technology to retailers.”
Flyers remain one of the few remaining bastions of traditional print advertising, with the industry valued at as much as $40 billion worldwide and $15 billion in North America, according to Flipp co-founder and CEO Wehuns Tan.
Tan said the company planned to use the funds to accelerate its engineering and product development, as well as introduce new consumer marketing “in the next few months.”
The free Flipp app has been downloaded approximately 13 million times in North America – including 6 million downloads in Canada – since its 2013 debut, with as many as 2 million Canadians using the app on a weekly basis. According to Tan, much of Flipp’s user base has been generated through word-of-mouth.
The app is currently in its fourth major iteration, with the latest version enabling users to add loyalty cards and create a shopping list while browsing flyers from a long list of retail partners. “Now it’s a one-stop shop for everything a consumer needs to do on a weekly basis,” said Tan, a first-time entrepreneur and engineer by training who previously worked in business development with Microsoft.
Flipp currently counts 50 million weekly views of flyers from 800 retailers, including The Home Depot, Walmart, Canadian Tire and Sobeys. Tan expects that number to grow as retailers increasingly shift their advertising budget from print to digital.
“Our share is less than 10%,” said Tan. “We’ve got a long runway ahead of us.”
But, despite Flipp’s success, Tan downplays suggestions he has hit a home run on his first entrepreneurial at-bat. “There’s no such thing as a home run,” he said. “It takes a lot of diligence and hard work. It’s like churning butter: You keep churning and churning to get the butter out.”
Tan said Canadian retailers invest approximately $2 billion a year in print advertising, with “the majority” of their investment directed towards flyers. He said retailers spend approximately 10 cents per flyer, but reach only about 10% of their intended audience.
“They’re looking at it and saying ‘Why should I print paper and have waste when I can now guarantee that I’m reaching consumers and driving them to my store?’”
According to a recent Nielsen survey, approximately 79% of primary household shoppers in Canada currently use either a print or digital flyer each week, with roughly one quarter favouring digital flyers – a number Tan expects to grow.
The big challenge for Flipp, he said, is educating retailers about the benefits of digital. He said a recent test in which an undisclosed Canadian retailer entirely eliminated its print flyers in favour of digital led to an increase in sales.
“A lot of retailers have had bad experiences with digital advertising, but with all of the data we have, we’ve been able to demonstrate that digital flyers can replace the print flyer,” he said.