How Does Upside Make Money

How Does GetUpside Make Money: All You Need To Know

Upside, originally GetUpside, is a cashback rewards software that assists customers in saving money on everyday transactions. It is a digital rebate and discount program offered in the United States on the iOS and Android platforms. GetUpside changed its name to Upside in April 2022 to reflect its “upside” beliefs for businesses and customers.

While it’s exciting to see how the company secures a win-win situation for both businesses and customers, it’s even more fascinating to see how GetUpside makes money.

Alex Kinnier (CEO), Jan Rubio, Rick McPhee, Thomas Vaughan, Wayne Lin, and Joanna Kochoniak founded the company in August 2016. The idea was to develop a new approach for customers to save money while also assisting businesses in increasing sales and revenue.

Upside offers a straightforward yet successful business model that enables it to generate income and expand its user base. There’s a reason it raised $165 million from venture investors in its most recent round of funding, bringing its worth to $1.5 billion. This article describes Upside’s business model and how it generates revenue.

Front Bottom Line

Upside earns money by dividing profits with its business partners. When a customer uses the app to make a purchase, he receives cashback, and the company divides a piece of the earnings with Upside. This model ensures that businesses, consumers, and the firm all benefit.

How Upside Works

To understand how Upside works, we must look at it through the eyes of two users: a business owner and a customer.

As a business owner, you want to boost sales and revenue while lowering marketing costs. You may give cashback rewards to customers who shop at your store by partnering with Upside. This incentive encourages more customers to visit your establishment and make purchases.

As a consumer, you want to save money on regular expenditures like petrol, groceries, and restaurants. When you shop at one of the many participating businesses, you can receive cashback benefits through Upside. You can save money on routine purchases by using the app without changing your purchasing habits.

To begin enjoying the benefits of Upside, users must first download the app, which is accessible for both Android and iOS platforms. They can browse through the many businesses accessible after opening an account, choose an offer, and claim it.

They need to pay for the item purchased just like they usually do and upload a photo of the receipt to the app. After verifying the purchase, Upside transfers the cashback reward directly into the user’s linked bank account. Users can then withdraw their cashback earnings through PayPal, direct deposit, or a digital gift card.

Upside Funding and Growth History

Alex Kinnier and Wayne Lin originally met while working on the Ad platforms team at Google. They later met at Opower, a startup acquired by Oracle for $532 million in 2016. Following their success at Google and Opower, the team founded Upside in 2016 with Jan Rubio, Rick McPhee, Thomas Vaughan, and Joanna Kochoniak.

Kinnier was able to collect $6 million in seed finance through his contacts as a former venture capitalist. This sum facilitated GetUpside’s launch in August 2016 and is responsible for the company’s early success. GetUpside began by focusing on the supply side of the business, signing up retailers in the Washington, D.C., area.

The major goal was to get as many local companies on board as possible so that attracting users would be easy. It’s a business strategy that other companies in the industry, like Ibotta and Rakuten, have adopted successfully. GetUpside began to attract consumers after signing up merchants by offering cashback rewards on ordinary purchases.

The company’s first concentration was on purchasing petrol stations. It began with restaurants in 2017 and eventually expanded to include grocery stores. It collaborated with companies such as BP and Kmart to provide cashback benefits on gas and groceries. Upside successfully raised Series B funding from Builders VC and Bienville Capital Management after only two years in operation.

As it moved into the broader cashback market, the company formed deals with some of its biggest competitors, including GasBuddy and Checkout51. As a result of the arrangement, Upside was able to promote targeted offers on its platforms and attract new users.

The Covid-19 outbreak impacted the economy hard in 2020, yet it turned out to be a tailwind for Upside. People were looking for methods to save money due to financial restrictions, and Upside’s cashback benefits became an appealing proposition. Bessemer Venture Partners later invested $35 million in Upside in a Series C fundraising round in September 2020.

On August 17, 2021, Upside announced a partnership with Uber, which will see the integration of Upside’s cashback rewards into the Uber app. This partnership allows Uber drivers to earn cashback rewards on fuel purchases from eligible gas stations. The company also partners with delivery companies like Instacart and Doordash for their drivers to earn cashback rewards.

As of July 2021, Upside had over 45,000 locations on its platform and over 30 million users. Its latest funding was in April 2022, when it raised $100 million in debt financing and $65 million in equity financing in Series D funding from General Catalyst, Builders VC, and Bessemer Ventures. This funding saw the company’s valuation increase to $1.5 billion.

How Does Upside (Formerly GetUpside) Make Money?

Upside, like every other platform that connects businesses and customers, makes money by charging businesses a commission or transaction charge. While this is somewhat correct, the organization has a more unique and intriguing business plan that aids in revenue generation.

Upside Business Model

The company operates a two-sided marketplace that benefits both businesses and consumers. On the business side, it provides a low-cost option to gain new clients. On the consumer side, it allows them to save money on everyday purchases.

The company generates revenue through a profit-sharing arrangement with enterprises. In essence, when Upside refers a new customer to a business and the firm accepts the customer’s purchase, Upside receives a share of the profit made from the sale. It’s a win-win situation for both parties because Upside isn’t paid until both the company and the customer are satisfied.

To put things into perspective, suppose Upside sends a new customer to a petrol station where the profit is $0.05 per gallon. If the average client purchases ten gallons of gas, the company will profit $0.5 per gallon. Depending on the terms of the profit-sharing agreement, Upside would receive a percentage of the $0.5 profit made by the gas station.

In this situation, the payback encourages the consumer to shop at the establishment. As such, it is a cost to the company. However, the acquisition cost is lower than if the company had to find the consumer on its own. For example, if the company tried to gain a customer by advertising, it would have to spend $5 to $10.

In contrast, if the company used Upside, it would just have to contribute a percentage of the profit generated by the consumer. In our scenario, if Upside took 20% of the gas station’s revenues, the station would only have to pay Upside $0.1 in commission. In the long run, this is a far more sustainable and successful method of acquiring new clients for businesses.

Let’s look at it in terms other than money. By overlaying a digital personalization and incentives component on top of their existing service, the company enables traditional brick-and-mortar enterprises. This strategy aligns Upside’s interests with those of its platform’s businesses and consumers, resulting in a more sustainable and mutually beneficial ecosystem.

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Upside Business Strategy

To discover customer purchasing trends, the Upside algorithm leverages anonymous data sources such as credit/debit card transactions, GPS data, and mobile app usage. It then uses this information to create unique cashback offers for each customer. For example, it may personalize and present an offer that a consumer hasn’t considered but would be interested in based on her previous purchasing history.

Upside’s major differentiator is its data-driven strategy. It enables the organization to create tailored and unique offers for each customer. As a result, consumers have a better user experience and businesses may gain new customers at a lower cost.

Exclusivity is another reason why brands would want to work with Upside. For example, if three grocery stores within a specific radius all participate in the same loyalty program, a consumer may not be incentivized to choose one over the other.

Upside will only display one offer per category at a time, ensuring that businesses are the sole supplier of cashback benefits in their sector.

This exclusivity provides businesses with a competitive advantage and drives more customers to their establishments. Furthermore, Upside is always extending its merchant network. It has alliances with large corporations such as Exxon, Safeway, and Starbucks. As its merchant network expands, Upside will be able to offer cashback benefits across a broader range of categories, appealing to a greater spectrum of consumers.

Additionally, Upside enables businesses to promote specific products by increasing the payback rate for such things. To encourage customers to buy milk, a grocery store, for example, could raise the payback rate from 2% to 5%.

While it is not direct advertising, it is a more subtle technique for businesses to steer buyers toward specific products. Furthermore, Upside does not charge businesses any monthly or sign-up fees.

Other Ways Upside Makes Money

You’d think that a cashback firm like Upside would employ ads to completely monetize its platform. It’s worth noting, however, that there are no banner advertising or pop-ups on the company’s app or website. While this may appear to be counterintuitive, it is an intentional choice.

Upside’s objective is to assist businesses in acquiring new customers at a lower cost. If the corporation bombarded its users with advertisements, it would negate the purpose of its site. Users would be less likely to use Upside if they were frequently interrupted by advertisements while looking for cashback deals.

Instead, it provides white-label software to its partners to assist them in running their cashback programs. While this is a less obvious method of commercialization, it is a significant source of money for Upside. Uber and GasBuddy are two companies that use this software.

How Does GetUpside Make Money? (FAQs)

Question: What is the Catch with the Upside App?

Answer: There is no catch for customers. You download the app, look for cashback offers near you, then activate the offer with your associated card. When you make a qualifying purchase, your cashback will be credited to your account within a few days. Profit sharing occurs behind the scenes between the business and Upside, so consumers are unaffected.

Question: Does Upside Sell Your Data?

Upside does not sell your data. According to its privacy policy statement, the data acquired is critical in the relationship between Upside and its customers, and the company is not in the business of selling data. To create personalized reward offers for each customer, the organization exclusively uses anonymized and aggregated data.

Question: Can You Use Cash with Upside?

You cannot use cash with Upside. The app is only compatible with credit and debit cards. When you find an offer you want to activate, you must use your connected card to complete the transaction. Within a few days, the cashback will be paid into your account. Prepaid credit and debit cash, gift cards, and EBT are also not accepted.

Question: What is the Downside of Upside?

Answer: Because using Upside is free, there are no significant drawbacks for customers. The only disadvantage for businesses is that they may lose clients who prefer to pay with cash or gift cards rather than debit or credit cards. However, this is a small percentage of consumers, and businesses are still likely to gain customers as a result of the Upside.

Question: Why did GetUpside Change Its Name?

The company announced a rebranding from GetUpside to Upside on April 26, 2022. The name change reflects the company’s idea that it provides an “upside” to both enterprises and consumers. This branding strategy is also consistent with the company’s goals of having a beneficial impact on the community and economy.

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