Gamification and social hooks have grown commonplace in consumer apps these days, and one company that’s utilizing them to build up a new e-commerce platform in Europe is raising a seed round to help it scale. Blidz, a social shopping app that offers big discounts on goods based on how many people are coming together to buy them (many items in categories like jewelry, clothes, and gadgets sell for just $0.99), then presents users with a selection of games on top of that to unlock more deals, has raised €6 million ($6.6 million at today’s rates) in a seed round of funding after seeing its early growth reach 50,000 monthly users.
General Catalyst and European VC Peak are co-leading this round, with D4 Ventures, Fabric Ventures, FJ Labs, and previous backer IPR.VC also participating, as well as a few individuals: Youngme Moon (a Harvard professor who focuses on the digital economy), Christopher North (formerly a longtime Amazon exec, now primarily an investor), and Doreen Doreen (a former Amazon exec who is now primarily an investor).
If the description of Blidz seems similar to you, it’s because it’s a clone of Pinduoduo, China’s enormously popular gamified social shopping app, which CEO Lasse Diercks, who co-founded Blidz with Markus Haverinen (CPTO), acknowledges as a direct influence. “We noticed the Pinduoduo trend, understood how the concept worked, constructed it, and launched it a little over a year ago,” he said matter-of-factly in an interview the other day.
The fortunes and problems of Pinduoduo are interesting bookends to consider when thinking about Blidz: The Chinese platform presently has a market capitalization of almost $60 billion (it is traded on Nasdaq in the United States) and nearly 870 million active buyers, however, recent growth has slowed due to increased competition and the worse performance of China’s economy as a whole. Blidz has a lot of promise, but it also has some of the same growth challenges in the long run. Longer-term issues, on the other hand, appear to be a long way off for a firm that is only a year old.
Diercks, like Pinduoduo’s founder Colin Huang, saw an opportunity to offer a different offering to the market beyond Amazon’s dominance, particularly the Amazon approach to e-commerce, which was essentially being replicated by other marketplace platforms (build for scale with a large number of SKUs, optimize around personalization, search, and ads to surface products to potential buyers, improve margins by providing your own products alongside these and/or not. Diercks stated, “Our objective is to liberate Western consumers.” “We want to provide a better and less expensive shopping experience for Western consumers.”
That offering, in his opinion, is answered in two ways. It all starts with the front-end experience. Blidz uses gamification (currently four games on the platform, with more to come) and social hooks (share your deal on your timelines and in messaging to friends and groups!) to engage users, encouraging them to create their own network effect by recommending products to people they know via other social channels, and for people to be persuaded to buy goods by seeing how many others are doing so, resulting in the price dropping as a result. (This was a ploy used before the internet, too, first pioneered by home shopping live TV shows when individuals called in to buy things.)