Canadian online coupon startup bought by News Corp. unit
Checkout 51, a Canadian digital coupon company founded just three years ago, is being bought by a unit of Rupert Murdoch’s News Corp.
News America Marketing, a News Corp. subsidiary, on Friday closed a deal to purchase the Toronto-based startup, which has built a mobile app that provides consumers with a way to use electronic coupons to earn cash back on their grocery purchases. The purchase price was not disclosed.
Noah Godfrey, one of the startup’s three Canadian founders, said linking with News America Marketing gives the company more reach within the United States. At the same time, News America Marketing, which has been building out its digital strategy, gains access to a successful mobile app.
“We’re now with a partner who can help us out, and we can help them out. It’s a great marriage,” Godfrey says. “We continue to do what we did before. It’s just that we now have more resources to do it.”
“Bringing Checkout 51 into the News America Marketing family allows us to offer new mobile options for our clients to reach consumers, with a smartphone-friendly, paperless and highly personalized experience that many of today’s consumers, particularly Millennials, find attractive,” said Marty Garofalo, CEO of News America Marketing.
Checkout 51, which employs 36 people, was founded in August 2012 by Godfrey and partners Pema Hegan and Andrew McGrath.
The company’s name refers to a “secret” or virtual 51st checkout lane that shoppers visit on the web to redeem their cash after going through the physical checkout lane at the grocery store.
The Checkout 51 app and website lists a variety of grocery items that have cash-back coupons available. Shoppers buy the items in the list. When they’re done, they submit pictures of their grocery store receipts to redeem the electronic coupons. When a user accumulates $20 of savings, Checkout 51 sends a cheque.
The immediacy of the process revolutionizes the traditional “clip and save” paper coupon business, Godfrey explains. “We give the right offer to the right person at exactly the right time. That really is a unique value proposition for us.”
The company’s app went live to Canadian users in December 2012, and was launched in the U.S. in January 2014. The app has one million users in Canada and three million in the U.S. The app’s four million users have saved more than US$15 million in those two-and-ahalf years, Godfrey says.
Godfrey is the son of Paul Godfrey, chief executive of Postmedia Network Inc., which owns the National Post.
The three founders founded Dose, an online magazine now owned by Newad, and a social recommendation site called GigPark that was sold to Canpages in 2009.