Paribus Raises $2.1 Million For Its Service That Saves Online Shoppers Money When Prices Drop
A service that helps online shoppers save when prices drop, Paribus, has raised $2.1 million in seed funding to continue to grow its business following the startup’s participation in the Y Combinator summer program and the Startup Battlefield at TechCrunch Disrupt NY 2015, where it first debuted. The company’s idea is to take a process that consumers were used to managing by themselves when they shopped at brick-and-mortar stores – that is, asking a retailer to honor a sale price after the item had been purchased – and translate that to the world of online shopping.
Of course, online prices fluctuate far more often than those in traditional retail, as e-commerce companies can programmatically adjust pricing in response to a variety of conditions. For example, Amazon alone makes around 80 million price changes every day.
For consumers, that means spotting a price drop on a past purchase is more of a challenge. And even if they happen to catch a sale in progress, most shoppers aren’t familiar with the procedures involved to request the price match or don’t want to waste their time haggling over a few dollars.
That’s where Paribus comes in. A sort of “set-it-and-forget” option for shoppers, Paribus integrates with the user’s email provider (e.g. Gmail, Yahoo, Hotmail/Outlook, iCloud), and then scans your inbox looking for receipts associated with your online purchases.
Currently, the service works with 20 major retailers, including Amazon, Best Buy, Walmart, Target, Bloomingdale’s, Macy’s, Bonobos, J.Crew, NewEgg, and others. When it finds that one of your purchased items has gone on sale, it will file the price match claim on your behalf. Some retailers only match their own prices for items, like Amazon does (excluding TVs and cell phones), while others will match a select group of competitors’ sales.
For shoppers, keeping up with each retailer’s price matching policy can be cumbersome and confusing, which is another reason why an automated service like this makes sense.
When Paribus finds savings, it takes a 25 percent commission – that’s not a huge problem for the end user, of course, since anything it finds was basically like “found” money in the first place.
When the service first launched, it had roughly 1,000 early adopters who had saved tens of thousands of dollars. Today, Paribus is nearing 50,000 customers, and has saved its user base hundreds of thousands. According to co-founder and CEO Eric Glyman, Paribus is now on pace to protect over $100 million in purchases against price drops every year.
In addition, he says that member growth has continued in the double digits every week since May as more people hear about the service.
“Primarily it’s been referral,” says Glyman, of where the growth is coming from. “Around half the people who sign up will share it.”
The company is also now acquiring users by way of its iOS application, which launched in August.
For what it’s worth, I’ve personally been using Paribus since its launch, and while I appreciate that it has my back, so to speak, the savings so far have been minimal. After logging 41 online purchases totaling $525, Paribus filed 3 successful claims that delivered $3.88 in savings.
To some extent, that’s because Paribus’s footprint is still small – the new TV I bought online was from a site Paribus didn’t cover, in fact. Meanwhile much of my online apparel shopping is from the clothing brands’ sites themselves. And other purchases come from retailers where savings is already a key focus, like Jet.com or Zulily, for example.
Glyman says that Paribus is planning to grow its retailer base in time, in response to user feedback. It plans to expand to other categories, like home improvement stores such as Restoration Hardware or Crate & Barrel, in addition to tackling popular online retailers, like Jet.
The new funding round was led by General Catalyst, and includes participation from Greylock, Slow Ventures, Foundation Capital, Soma Capital, Conversion Capital, 1/0 Capital, Y Combinator and Mick Johnson (Facebook’s Former Director of Product).
New York-based Paribus, today a team of five, is expecting to double its headcount by hiring more engineers following the round’s close. The team is also preparing to launch a new product next year that will focus on credit card price protection.
Explains Glyman, “a lot of the stores have periods of 7 days or 14 days, but credit cards have periods of up to three months…so if we can get anybody’s money back for three months on any purchase, that would be great,” he says.
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