Price comparison site mySupermarket has raised $10 million in a financing round led by WPP Digital, a unit of ad agency WPP plc (LSE: WPP; Nasdaq: WPPGY), which was joined by previous investors Greylock Partners and Pitango Venture Capital. The company has raised $32 million to date. WPP invested $7 million for a minority stake in the company.
mySupermarket is the operating name for Dolphin Software Ltd., which operates different sites in different countries, including the UK and Israel. mySupermarket provides price comparison of products sold by supermarkets. In contrast to other price comparison sites, mySupermarket offers alternatives to consumers to pick the cheaper product within a category or style.
For example, if a consumer picks the laundry power of a particular brand, mySupermarket will not only offer a lower price for the same product, but will also recommend similar products to the brand at a cheaper price.
WPP's investment in mySupermarket is considered quite an achievement for the Israeli company. WPP is a leading global ad agency, operating 2,400 agencies in over 100 countries, and had ₤10 billion revenue in 2011.
mySupermarket president Amir Ofer founded the company in 2006. It has 75 employees, including 40 in Israel, and the rest at its offices in London, New York, and Tokyo.
mySupermarket CEO Alon Bloch said, "WPP works with most of the leading global brands. As far as I am concerned, this is a great opportunity. They have a strong understanding of the market and extensive ties. It would take me years to achieve them."
Bloch is a former partner at Jerusalem Venture Partners (JVP), who also currently serves as a director at Wix Ltd.. He says that the financing will help mySupermarket to expand to new markets, including the US later this year, and into the mobile market.
Bloch says that mySupermarket's UK service, which has been operating for several years, has 180,000 products, and 5,000 new products are added monthly. He says that the average user buys 40 items and spends 18 minutes online. The company's business model is based on advertising of the items on the site, which appear as banners.
mySupermarket Israel was launched recently. Four retail chains are currently participating with it, but the main problem is that online prices are sometimes higher than the prices in stores, on top of which is the delivery cost.
Industry sources attribute part of the difference in prices to the logistics cost of collecting items from store shelves by supermarket employees. "It's scandalous that items in Israel are more expensive online. In the UK, by law, online prices cannot exceed store prices," says Bloch. As for logistics costs, he points out, "You're already paying shipping fees, so why raise prices further?"
He says that the solution is to build more efficient logistics systems. "Look at Amazon.com, which built warehouses across the US to lower shipping costs."
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2012
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