Thanks to its generous cashback program, Fetch Rewards is becoming the preferred way to save money on everyday items and gain extra rewards. The platform currently has 15 million active shoppers, with Gen Zers and Millennials being its top users.
Moreover, reports show that Fetch users have so far saved over $750,000 just by scanning their grocery store receipts and making purchases at participating stores. But given it’s free to use and download, and part of an industry that’s expected to top $200 billion by 2024, one can’t help but ask – how does Fetch Rewards make money?
Read on if you’re curious about the specifics!
How Does Fetch Work?
Fetch Rewards works by enabling users to log receipts (paper and electronic) for purchases made at any store. This way, shoppers collect rewards points that they can spend to redeem gift cards from brands like Starbucks, Amazon, Airbnb, and more.
It’s available via a mobile app that is free to download and very simple to use. To register their purchases and start collecting points, users only need to snap a photo of the receipt and upload it to the platform – all of which takes less than ten seconds. For every uploaded receipt, Fetch Rewards users get at least 25 points.
Additionally, users can link their Fetch Rewards app to their Amazon account. This way, the points get automatically ‘fetched’ from the user’s order history on Amazon.
Other ways users can earn points on Fetch Rewards are by:
- Making purchases from the stores featured in the ‘Brands’ section. By buying participating items, a user will be awarded points based on the final price paid after all discounts and savings have been applied.
- Buying items that are promoted as a special offer on the ‘Discover’ page.
- Referrals or bringing a friend to Fetch Rewards. This way, a Fetch user can earn at least 100 points or more once the new user uploads their first receipt.
Note that 1,000 Fetch Rewards points are typically worth approximately $1. Also, the company recently adjusted its policy on the number of points needed to redeem many popular gift cards.
Finally, even though earning points is simple, it may take some time for a Fetch user to accumulate points to get gift cards. Still, it’s a great platform and one that can be used by anyone, even teenagers who are looking for easy ways to earn money.
How Does Fetch Rewards Make Money?
Fetch Rewards makes money by charging affiliate commissions, or referral fees, to retailers that are part of its network. Additionally, the company relies on interchange fees originating from the use of its MasterCard debit card called Fetch Pay.
However, in April 2022, Fetch announced that it has raised $240 million in equity and debt that is to be used to help the company accelerate and scale. So, in addition to affiliates and interchange fees, Fetch Rewards’ business model is now open to funding from outside investors.
Here’s how Fetch Rewards earns money from each.
1. Affiliate Commissions
Fetch Rewards derives its main income from the affiliate commissions it charges its retail partners for being listed and participating in the platform. Whenever a user purchases an item and uploads their receipt, these partners recompense Fetch Rewards accordingly.
The company and its partners negotiate the commission rate for each transaction. This fee is usually based on sales volumes generated from users. As with other affiliate programs, a higher number of transactions means lower affiliate fees for the brand partner.
But partnering up with Fetch Rewards is not all about commissions. The platform offers a valuable reach for CPG companies, restaurants, and retail brands who pay Fetch to showcase their products and earn rewards. Increased visibility and customers are other benefits Fetch brand partners enjoy – after all, Fetch has over 17 million monthly users.
2. Interchange Fees
The Fetch Pay debit card branded by MasterCard was made available to users in 2020. It’s a product that works just like any other debit card, with the difference that users can accumulate points every time they pay for transactions using Fetch Pay. It can be used wherever MasterCard cards are accepted.
In return for using the card, Fetch Rewards receives money in the form of interchange fees. But Fetch does not get all of it. The interchange fees are divided between the merchant that typically receives around 1% of the transaction, MasterCard, and what’s left is revenue from Fetch debit card users.
3. Investments
Funding is a relatively recent addition to Fetch Rewards’ revenue and is mostly due to the fact that the company showed tremendous growth over the past few years. In fact, Fetch is now the fastest-growing rewards app in the US, has over 15 million active users who have uploaded over two billion receipts, and has paid out millions in rewards points.
And so, in addition to its funding from SoftBank Vision Fund 2, ICONIQ Growth, DST Global, Greycroft, Gaingels, and Headline, in 2022, Fetch Rewards made a big splash when it announced that its latest round of funding is a staggering $240 million.
This, coupled with the funding Fetch is already receiving from other investors, brings the company’s funding to over $500 million. Some of its new high-profile investors include Archer Venture Capital, NielsenIQ, TelevisaUnivision, and Yieldstreet Fund.
How Much Money Does Fetch Rewards Make?
Fetch Rewards made $9 million in revenue in 2022. However, the company does not disclose any other financials, including profits or losses, so we are unable to check whether the company is profitable.
But considering it managed to raise an incredible $240 million in equity and debt to help it grow even more, we are yet to see what the future holds for Fetch Rewards.
For now, based on the information available, we can only answer how Fetch Rewards makes money and share the data that, at present, it has 226 employees who generate a revenue per-employee ratio of $39,823.