Digital flyer company Flipp Corp. has raised $61-million with plans to slim down the weekly wad of printed supermarket and retailer flyers that most Canadians contend with every week.
"In North America alone, $15-billion worth of flyers are being produced," says Wehuns Tan, chief executive officer and co-founder. Flipp aims to replace those expensive physical flyers with cheaper and more trackable digital versions that come with more features for shoppers.
The Toronto-based company has 50 million weekly viewers of its flyers (12 million have downloaded its app) that promote 800 retailers with 140,000 locations across North America. Among its clients are Wal-Mart, Canadian Tire, Home Depot Canada, Sobeys, Macy's and Lowe's, although most also still distribute print versions.
According to consumer research that Flipp conducted with Nielsen Co. in Canada, 79 per cent of "primary household shoppers" use digital and print flyers weekly. About 16 per cent cent are using only digital, but among millennials, the share rises to 26 per cent.
"We've spent a lot of time thinking about newspaper disintermediation," says Zachary Kaplan, vice-president at General Atlantic, which is leading the investment with participation from previous funder Insight Venture Partners. "We look at the shift in consumption and we think the shift is still in early innings."
The disruption of the print business has been felt by players such as Transcontinental Inc., Canada's largest printer, which reported flat flyer revenue in 2015 that it attributed in part to Target's departure from Canada. Adam Shine, an analyst with National Bank Financial, projected a 4.7-per-cent revenue decline in the company's printing business for fiscal year 2017, according to a research note in October, 2015.
Although few retailers have made the jump to all-digital flyers, there are early signs of that transition.
"We're using our analytics to help them figure out where they can start scaling print back," says Michal Martyniak, co-founder of Reebee, another digital flyer startup based in Kitchener, Ont. Even though the upstart Reebee, founded in 2013, focuses only on Canada, it has two million users and many of the same digital clients Flipp has – the likes of Canadian Tire and Home Depot cover their bases on both platforms.
"The migration of print dollars is one thing, but around the coupon space, there's a lot of additional opportunities," says Mr. Tan, who is adding more features for shopping and couponing to the app.
Mr. Tan says the cash injection will help Flipp pull in more users as the company focuses on international expansion, joining what he estimates as the $40-billion worldwide circular market.
The company, founded in 2007 and named Wishabi until March, 2015, has 500 employees between Toronto and New York offices, and had previously raised $16-million in venture capital. Mr. Kaplan will be joining Flipp's board and General Atlantic will become a minority shareholder.