20 Apr Scott Resnick: Fetch shows potential for high-growth technology companies in Wisconsin
Scott Resnick – Wisconsin State Journal columnist:
Fetch Rewards has delivered to Madison its first unicorn — and, at least as important, lessons for how to achieve more high-growth startup companies. A “unicorn” in the technology sector is a venture-backed startup with a valuation of $1 billion or more. Currently, only 632 unicorns are in the entire world — across 11 countries. Just 10 of those unicorns are in the Midwest. So it’s a big deal that in late March, for the first time, Madison minted a unicorn named Fetch.
Fetch is the fastest-growing consumer loyalty mobile app. It allows shoppers to earn free rewards on their everyday purchases by simply snapping photos of their receipts. The app has nearly 7 million active users and has delivered more than $120 million of savings to its customers.
The reason we know Fetch is a unicorn is because in March it raised a $210 million round of venture capital funding from Softbank, one of the world’s largest venture funds. Investors valued the company at upwards of $1.5 billion. It’s an exciting event and an opportunity for reflection.
Fetch took advantage of the UW-Madison Business Plan Competition, which awarded it second place and early seed money. It received early legal assistance from the Law and Entrepreneurship Clinic on campus. And it received a $500,000 Technology Development Loan and around $1.25 million in Qualified New Business Venture tax credits from the Wisconsin Economic Development Corporation (WEDC).
Lessons can be learned from Fetch’s success. I’d be negligent if I didn’t discuss how Fetch represents a missed opportunity for some. Local venture capitalists who were leery of investing in Fetch repeated the same phrase to me over and over: “You cannot build high-growth companies in Wisconsin.” Well, Fetch has proven you can.