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Swipely Inc. has raised $7.5 million in a Series A round led by blue-chip VCs and a handful of ‘super angel’ investors from the West Coast and Europe. Providence, R.I.-based Swipely also announced its social purchase-tracking service will launch in invitation-only beta this morning.
In November, the startup raised a seed round worth $875,000 led by Philadelphia VC firm First Round Capital. The round also included an out-of-pocket investment by founder Angus Davis, an early Netscape employee whose last company, TellMe Networks, sold in 1999 to Microsoft Corp. (Nasdaq: MSFT) for a reported $800 million.
TellMe investor Danny Rimer of British VC firm Index Ventures is leading the new round with Greylock Partners, where LinkedIn founder Reid Hoffman, a Greylock partner, is leading the firm’s investment and taking an observational seat on Swipely’s board. Angel investors Chris Sacca, Keith Rabois, Ron Conway and Anton Commissaris are also participating, Davis said, as is Providence-based Lee Hower, who recently left Point Judith Capital.
“For most of these investors, it was the first time they had invested in a Rhode Island company,” Davis said.
Swipely is pre-revenue. The company, launched last year, has focused on stealthily building the user side of the site it unveils today, which is free, Davis said. Invited users will be able to in turn invite their friends to the service, which does not share purchases automatically, but instead invites users to share and comment on their purchases via an e-mail that goes out automatically after a purchase is made. Davis said there is no cap on the number of users, but the company will be watching closely to see if it can achieve the kind of viral adoption it hopes to get.
Later, Swipely is planning to introduce advertising in the form of ads and loyalty programs, modeled after the location-based mobile application Foursquare, targeting users based on information they contribute. In Swipely’s case, users known to shop at one clothing store might be advised of specials at a competitor - or regular shoppers could be given special offers. Swipely also plans to provide analytics software based on the user data it collects.
Users’ sensitivity to sharing credit card data may be a roadblock. Last month a bug in a similar social spending site, Blippy, inadvertently revealed a handful of users’ credit card numbers on Google search pages. Davis said the company has worked to ingrain customer security into its culture. Unlike sites such as Facebook, which have taken flak for site changes that revealed previously hidden user data, “The default assumption (at Swipely) is, ‘We wouldn’t want to show that without asking the customer first,’” Davis said.
Swipely has 10 employees now and is hiring for five open positions. Davis declined to put a number on his hiring plan for the year, but he said he'll be hiring mostly engineers.
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