Fondue raises $10.5m to help brands ditch discount codes

We’re thrilled to officially launch Fondue and announce $10.5m in seed backing to replace every ecommerce coupon code with a more profitable and higher converting alternative: CashBack. As brands focus on profitability now more than ever, and their discount code addiction is at an all time high, we launched Fondue to rebuild discounting from the ground up. 

Until recently, “growth above all” has been the mantra of ecommerce founders, marketers, VCs, brand buyers and lenders alike. To meet this mandate, brands started to discount more and more, conditioning shoppers to expect and wait indefinitely for the next promotion. This cycle was reinforced and accelerated for a simple reason: it worked. Ecommerce flourished over the last decade.

But brands today are slammed with slowing revenue and compressing margins as the economy cools, inflation rises, and shopper spending slows. It’s never been harder or more important to be profitable. Even the most resilient brand founders and operators need new tools and new partners to navigate this storm and come out on the other side better for having gone through it. Brands did this masterfully to overcome pandemic-induced demand skyrocketing at the same time that supply chains ground to a halt. Brands deftly did this again to thrive in a world after iOS 14/15 shattered the world’s dominant acquisition channel overnight.

Now brands need a way to continue growing while increasing profitability. Starting to sound like having your Fondue and eating it too?

Good news, that’s just what CashBack does.

At Fondue we've built CashBack to be a better discount: larger AOV, more profitable on first purchase, greater engagement, and higher LTV. It can’t be leaked to discount aggregation sites…and did we mention that shoppers love it? Instead of a pre-purchase incentive (like a coupon code) shoppers see their CashBack eligibility throughout the purchase journey and then redeem it post purchase in a method they choose: extra store credit, gift cards, cash, and more to come soon.

Giving agency to shoppers to choose the incentive that works for them means brands can efficiently distribute discounts to where they are needed most. 50% of shoppers who redeem take a gift card back to the same store instead of cash, and many don’t redeem at all. Brands can choose to retain this extra revenue or capture more price sensitive shoppers with higher CashBack offers.

This is a collaborative journey and we’re not alone. Fondue emerges from stealth, starting in the Shopify ecosystem, already working with over 100 brands and backed with $10.5M in seed funding from Quiet Capital and Hanaco Ventures as well as Infinity Ventures, Ground Up Ventures, Sugar Capital, Starting Line, R-Squared Ventures, Gaingels, Verissimo Ventures. We’re fortunate to have great angels as well: founders and executives from Casper, TheRealReal, Thumbtack, Candid, Caraway, CatchCo, Loox, Perry Ellis, Melio, Ramp, Venmo, and others.

Ready to ditch the discount codes? 

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Sincerely,

Oren, Will, Abraham & Fondue crew