Claim - Benefits With Friends

Company & Team Introduction

Claim is a viral consumer shopping app that empowers friends to earn, trade, and share rewards. The company was founded in November 2021 by Sam Obletz (CEO) and Tap Stephenson (CTO), a pair of lifelong entrepreneurs and former Yale roommates who reunited at Havard Business School. Prior to founding Claim, Obletz worked at Goldman Sachs and started building e-commerce websites at age 11, while Stephenson held roles as an Engineering and AI Program Manager at Microsoft and was a founding engineer at a YC-backed startup, giving the pair a potent blend of business and technological knowledge. Claim is spreading like wildfire through college campuses across the US as the company sets its sights on becoming the social shopping app for Gen Z. The company is headquartered in Boston, Massachusetts and has grown its team to ~12 people.

Product Overview

Claim’s disruptive social commerce platform offers a shopping experience unlike anything else available in the market today. The company allows users to collect cash back through their own purchases and if friends purchase based on their recommendations, which fosters community and drives platform engagement. Another exciting feature of Claim is how they utilize Plaid to securely verify transactions and analyze the credit card data of the card linked to an account to better understand you as a consumer and send relevant offers that users are actually interested in. Claim also has a drop day on Thursdays where they share a bunch of Claims, creating excitement and building a routine for customers to discover and share products around the same time. The company also focuses on creating a secure platform with an incredibly easy-to-use interface; it is committed to never selling personal user data.

Total Addressable Market

Claim is tackling a massive opportunity with a unique differentiator from competitors. According to research from researchbuisinessinsights.com, the total addressable market for global cash-back rewards was already worth ~$3.1B in 2021. The research also forecasts a healthy 6.98% CAGR for the industry, expanding the market size to north of $6.1B by 2031.

Business Model & The Numbers

Claim’s business model is simple: customers try the app out, and whenever they make a purchase, Claim charges the merchant the required amount for cash-back rewards, and the merchant takes a small additional fee. This reduces onboarding risk for merchants, as there are no upfront costs or setup; brands only pay when they make a sale. Everyone wins, brands acquire new customers at a set rate, and customers get valuable discounts on things they want to purchase. Claim also provides some serious value to merchants, including a 4.8x return on ad spend and a 50% conversion lift following a Claim drop.

Traction

Claim has seen promising adoption from both the consumer and partnership sides. The claim has seen incredible early traction on the partnership side as the company quickly forged partnerships with various companies, from Fortune 500 darlings like Pepsi to DTC startups For Others and fast-casual restaurants like Life Alive. Other companies that Claim has forged partnerships with include Sweetgreen, Gong Cha, Shake Shack, and Blank Street Coffee. Adoption on the consumer side is equally impressive; the claim has already spread like wildfire through over 70 campuses’ across the US; the company is growing exponentially, with users growing 86% MoM over the past semester.

Competitors

The loyalty and rewards market is nothing short of crowded. However, Claim’s unique product offering, coupled with its adoption on both sides of its platform, indicates that the company is well positioned to see outsized growth compared to the broader loyalty and rewards industry due to its differentiated platform. Claim works via cash-back, not gift cards, immediately differentiating it from girl card-based reward apps like Fetch rewards and ShopKick. Competition from cash-back players includes Rakuten, which is the massive incumbent in the space and has one of the largest networks of merchants on their platform that does not have the social aspect and also offers dated payout options: users literally have to choose between being sent a cheque or via PayPal are paid out on a quarterly basis. Another competitor, Dosh, offers instant cash-back rewards to users with much better payout options than Rakuten, including direct deposit, PayPal, or gift cards for a more streamlined experience. Still, Dosh’s offering is highly differentiated from Claim; Claim automatically detects transactions and pays users out via Venmo; no more dealing with moving rewards from your PayPal account and better integrating their product into a user’s existing shopping habits. Dosh also doesn’t offer any social aspect on their platform, which allows users to be rewarded based on making recommendations to friends.

Funding

Claim has secured funding from a list of first-class investors. The company’s initial funding was a $2M round from an undisclosed group of investors. The company's next funding event was another $2M pre-seed round in April 2022 led by Chad Byers from Susa Ventures and Greg Rosen from BoxGroup, with participation from other investors, including The Kraft Group, 6th Man Ventures, A* Capital, Reflexive Capital, GSW Sports Ventures, and Luke deWilde (ex-Senior Manager of Corp Dev, GS Warriors). Claim’s subsequent funding was raised in December 2023 when the company raised a 4M seed round spearheaded by Sequoia partners Jess Lee and Josephine Chen, with a range of other participants including follow-on investments from notable firms Susa Ventures, BoxGroup, The Kraft Group, 6th Man Ventures, A* Capital, Reflexive Capital, GSW Sports Ventures, and Luke deWilde (ex-Senior Manager of Corp Dev, GS Warriors) and new investors Theia Ventures. Claim announced last week it had raised a $12M Series A with VMG Technology leading the round, previous leads Sequoia Capital and Susa Ventures doubling/tripling down on their initial investments and new investors Lightbank and MetaLabs. Claim has received $20M in total funding.