Flashback Friday: Squeakee Media (OffersOn)
Squeakee Media Private Limited was a provider of cloud-based ecommerce store builder on a subscription model helping offline SMBs to go online. Offerings include multi-channel automation, content management, cart & payment gateway integration, logistics, email integration, and invoicing.
Squeakee launched its mobile application for android in 2014. They also launched their new domain name OffersOn, to increase visibility. OffersOn used a map-based interface to help confused consumers with the best deals within the area of choice in categories such as pubs, food, electronics, apparels, mobiles, beauty, and so on in cities Mumbai, Delhi, Bangalore, and more. Once a user clicks an offer, they get details like the address of the store or restaurant and the contact number.
In 2016 ShopClues acquired the IP of a SaaS platform from Squeakee Media.
|Founder:||Abrar S||Total funding raised||USD 450,000/-|
|2020 status:||Acquired by ShopClues||Number of rounds||2|
|Co-investors:||Mumbai Angels, Kae Capital|
Why did you invest in Squeakee?
In 2013, ecommerce in India was still in its infancy stages, accounting for just 0.60% of total retail sales. There was a general perception that touch and feel were necessary when buying products, unlike today, where the ecommerce share of total retail sales stands at 4.8%. Yet it was difficult to know what brick and mortar stores had on offer. Squeakee used your phone’s GPS to provide the best offers in the area, giving offline stores a chance to compete and make specific offers to the user. It was a great way to push online customers to stores and increase footfalls.
What were the risks involved with the investment in Squeakee?
The most significant risk with investing in a marketing-tech platform is that the loyalty of the customer is towards price discovery, and the lowest price will always win. Squeakee had to convince the retailer to either continue maintaining high discounts or keep increasing them to be relevant to their customer.
This works against the retailer’s interests since they need to keep dipping into their margins to stay relevant on the platform. The retailer might do it initially to get discovered, but they realize that a consistent discounting model is bad for business.
Eventually, the customer interest will reach a plateau after which no further discounts will convince them to buy. You must offer something beyond just discounts to keep customer loyalty, i.e., greater discounts = no profits.
Therefore discount or marketing models carry the inherent risk of losing consumer & retailer interest after the initial euphoria has worn off. The barrier to entry in such plays (as I discovered later) is quite low.
What did you like about the founder Abrar?
Despite taking on a very challenging business, he stuck at it for 6 years, never throwing in the towel until ShopClues acquired them. I admired his intelligence, tenacity, and that he was willing to work hard. Those are the qualities that I would back again and again.
What are your learnings from investment in Squeakee, and would you invest in a similar startup today?
Building loyalty on discounting and pricing is excellent in the short term, but business suicide in the long run. The customers will only use your platform if it has the best prices and nothing beyond that. It encourages undesirable customer behavior, i.e., you cannot build a business on offering the highest discounts or lowest pricing.
I also believe Squeakee was too early for its time. If it launched two years ago, I think their experience would have been different. I have learned that businesses based on the coupon or discount model cannot scale beyond a point; therefore, I wouldn’t invest in a similar startup today.
However, I would invest in a founder like Abrar again.