B4| Monday, December 7, 2020 THE WALL STREET JOURNAL.
TECHNOLOGY WSJ.com/Tech
cently raised $80 million in
new funding. Fetch Rewards
was valued at more than $600
million after this deal, accord-
ing to a person familiar with
the situation. Mr. Schroll con-
firmed that figure.
Iconiq Growth, a $9 billion
investment manager affiliated
withIconiq Capital, led the Se-
ries C financing with DST
Global participating. Prior in-
vestors Greycroft and e.ven-
tures also joined the deal.
In addition to the primary
investment, the company’s
early backers also sold $30 mil-
lion through a secondary sale,
Mr. Schroll said. Secondary
sales of this kind have become
more standard over the past
few years. The CEO started
working on the business as asophomore at the University of
Wisconsin-Madison and incor-
porated it in 2014.
Fetch Rewards competes
with other brand-loyalty and
coupon providers, such asIbotta Inc. Recently, PayPal
Holdings Inc., bought rewards
startup Honey Science Corp.,
for about $4 billion.
Fetch gives points to users
who upload pictures of theirstore receipts to an app. The
points can be redeemed for gift
cards.
Companies such as PepsiCo
Inc., Kimberly-Clark Corp., Uni-
lever and others pay for the re-
wards when their brands are
purchased. Fetch Rewards gets
a small percentage as revenue.
Brands get exclusivity in their
category, Mr. Schroll said. They
also get a view into shoppers’
aggregate purchasing behavior.
The company is approaching
a $100 million revenue run
rate, according to Mr. Schroll.
That figure stands for the latest
month’s revenue annualized.
Fetch Rewards helps brands
compete with store brands,
which have been gaining mar-
ket share. Store brands across
all U.S. retail outlets increasedsales in terms of dollars by
14.6% in the first quarter of
2020, compared with an in-
crease of 11.5% for nonstore
brands, according to Nielsen
data provided to the Private La-
bel Manufacturers Association.
People “want to be purchas-
ing the brand name,” Mr.
Schroll said. “Fetch enables
them to feel good about it.”
About 16 million people have
downloaded the Fetch Rewards
app to date, and the company
expects to end 2020 with about
6 million monthly active users,
up from about 2 million at the
beginning of the year. Users
scan about 20 receipts every
month on average.
While the app has mostly
positive reviews, some custom-
ers complain that it takes toolong to accumulate meaningful
rewards and that their accounts
are sometimes suspended un-
fairly before payouts are is-
sued. The company says that
the amount earned depends on
what brands shoppers buy and
whether they use special offers.
Some users try to cheat the
system, but Fetch Rewards said
it investigates all claims of in-
correct deactivation.
This year, Fetch Rewards be-
gan adding restaurants and
more consumer packaged-goods
brands. Fetch Rewards has 286
employees and expects to more
than double that next year.
Mr. Schroll dropped out of
college to pursue the business,
which went through a couple of
iterations before hitting its cur-
rent form in 2017.When Americans rushed to
stock up on toilet paper and
other essentials in the spring,
Fetch Rewards, a shopping sav-
ings app, faced a challenge.
As more consumers sought
to stretch their dollars during
the pandemic, demand for the
app went up, according to Wes
Schroll, co-founder and chief
executive of the Madison, Wis.-
based startup. At the same
time, some of the brands it
works with pulled back from
offering promotions because
they had more demand than
they could serve.
Fetch Rewards managed
through that period and ended
up increasing both its user base
and revenue. The company re-
BYYULIYACHERNOVA
App Fetch Builds on Shoppers’ New Quest for Savings
Wes Schroll,
co-founder and
CEO, started
working on the
business as a
sophomore in
college.In the film industry, it’s
common to charge a higher
price for early viewing, reduc-
ing the price as time goes on.
For some, the “Mulan” price
was a bargain. Between pop-
corn, drinks and tickets, a fam-
ily outing to the theaters easily
exceeds that. For others, $30
was too high.
During its opening weekend,
“Mulan” appeared as No. 10 on
Nielsen’s U.S. streaming charts,
with 525 million minutes
streamed. In November, Disney
Chief Executive Bob Chapek
said he was “pleased with the
results” of “Mulan” but didn’t
divulge numbers. Mr. Chapek
said there is a future for newly
released, pay-per-view movies
on the platform.
The studio’s next big film,
Pixar’s “Soul,” will be available
to all Disney+ subscribers on
Dec. 25—without a “premier
access” price tag. “The idea
was that it was a really nice
gesture to take ‘Soul’ during
the holiday period and provide
that as part of the service,”
said Mr. Chapek on an earnings
call.
AT&TInc.’s WarnerMedia is
sticking with the all-you-can-
stream approach. Also on
Christmas, the studio will re-
lease “Wonder Woman 1984” to
its HBO Max subscribers for no
charge. The studio said last
week it plans to release its en-Free Advertising
In March, shortly after stay-
at-home orders swept the
country,Zoom Video Commu-
nicationslifted the 40-minute
meeting limit on free accounts
for K-12 educators. And re-
cently, the company removed
meeting limits for Thanksgiv-
ing Day.
Chief Operating Officer
Aparna Bawa acknowledged
the service’s influx of free rid-
ers is part of a plan.
“For us, it’s a long game.
The more and more we can
build our user base and estab-
lish trust,” she said at WSJ
Tech Live in October, “the
morelegswehaveasacom-
pany.”
In the popular “freemium”
model, the more users are ex-
posed to a product, the more
likely some will pay for extras.
In the most recent quarter,
Zoom’s revenue grew 367%
year over year.
NikeInc. pulled the sub-
scription fee for its $15-a-
month Nike Training Club app
early in the pandemic, and
soon reported an 80% increase
in-app workout activity.
Users see trainers wearing
Nike clothing and a shop
where they can buy their own.
As a result, apparel sales in-
creased. Nike said it is making
Training Club free, perma-
nently.size their lifestyle,” he said.
Meanwhile, Apple’s smart-
phone competitor Samsung
ElectronicsCo. launched its
flagship Galaxy S20 5G phone
in February. As the pandemic
continued, Samsung scrambled
to develop a cheaper version,
the Galaxy S20 FE, to appeal to
customers on tighter budgets.
(Dow Jones & Co., publisher
of The Wall Street Journal, has
a commercial agreement to
supply news through Apple
services.)
A Premier Experiment
“Mulan,” a $200 million
live-action remake years in the
works, was supposed to have a
big theatrical release—but the
coronavirus had other plans.
Instead, Walt Disney Co.
charged $30 for at-home “pre-
mier access” to the title, for
people paying $6.99 a month
for a Disney+ subscription. Af-
ter three months, “Mulan” be-
came available on the service
for no extra charge.
Continued from page B1
Pricing Is
Pandemic
Pivot
tire 2021 film slate on HBO Max
and in theaters simultaneously.One Is the Loneliest
Number
A seminal 1992 research pa-
per looked at a $275 bread-
baking appliance sold by Wil-
liams-Sonoma. When the
retailer added a second model,
larger and more expensive at
$429, sales of the cheaper one
doubled.
Peloton InteractiveInc. em-
ployed a similar strategy with
its new two-tiered bike offer-ing. In September, when the at-
home fitness company released
Bike+ for $2,495—with a bigger
screen and more powerful soft-
ware—it marked its original
bike down to $1,895, from
$2,245. The pandemic led to an
explosion of demand for con-
nected bikes as gyms closed.
This year, Peloton’s sales
jumped 172% compared with
last year, and the company
posted its first-ever profit.
“It was really important to
lower the price of our bike by
$350,” said Jill Woodworth,chief financial officer, in a Sep-
tember earnings call. “Obvi-
ously that has an impact on our
gross profit margin,” but Ms.
Woodworth said she believed
the original bike will be Pelo-
ton’s bestselling hardware due
to the more accessible price.
Since then, the demand for
the Bike+ exceeded Peloton’s
internal forecasts, resulting in
longer wait times, currently as
much as 10 weeks, a spokes-
man said. The first-generation
bike is available in as little as
four weeks.During its opening weekend, ‘Mulan’ appeared as No. 10 on Nielsen’s U.S. streaming charts.JASIN BOLAND/DISNEY+/EVERETT COLLECTIONEnjoy a world of
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