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Boston Business Journal - October 20, 2006
Mall Networks’ Pedigree Earns it a $2M Second Round
By Lisa van der Pool
Mall Networks Inc., a startup that connects online retailers with organizations looking to beef up loyalty programs, has received $2 million in its second round of venture capital funding from The Venture Capital Fund of New England in Wellesley and IDG Ventures in Boston.
Backed by more than just venture capital dollars, the year-old Lexington-based company is staffed by a handful of executives with proven success in the online loyalty space.
Mall Networks was co-founded by David Andre, the founding CTO of Upromise Inc. in Needham and former vice president of engineering at Lycos Inc. in Waltham. Kimathi Marangu, co-founder and executive vice president of business development, was previously general manager at Schoolpop Inc. in Atlanta, a company that helps schools and nonprofits earn contributions by connecting them with merchants. Kristyn Golier, Mall Networks’ vice president of merchant development, served previously as director of online shopping at Upromise.
“We have the who’s who of who makes successful online shopping sites,” said Andre. “It’s really an incredible team.”
Mall Networks helps its clients enhance their loyalty programs by outsourcing their Internet shopping portals so members can access Mall Networks’ 350 merchants, including Gap.com, Bestbuy.com and Toysrus.com, and earn points through the online malls. The startup creates custom-made sites for partners in several areas, including professional sports teams, membership organizations, credit cards and banks and rewards programs.
“There are two things that attracted me to the company. One is the team,” said Carl Novotny, general partner at Venture Capital Fund of New England and founder of of affinity marketing company First USA Partners. Novotny will join the Mall Networks board as part of the deal. “Also, the marketplace is one that I know a lot about.”
Mall Networks will not disclose its total amount of venture funding. The Venture Capital Fund of New England led the current round with participation from existing investors IDG and LBO Enterprises in Boston. Mall Networks will use the money for product development and marketing. The 13-person company derives revenue by taking a percentage of the commission from merchants.
Their client list includes NASCAR Racepoints in Wakefield, Arizona Diamondbacks and Epilepsy.com.
NASCAR Racepoints, NASCAR’s loyalty program, has been using Mall Networks for about a year to enhance its members’ points-earning potential by expanding the number of online merchants that will honor members’ points.
“It’s probably the most advanced of the solutions out there,” said Thorp Foster, president of NASCAR Racepoints. “There are other providers, but none that have the explicit direction of David’s model. He was essentially focused on creating a service for loyalty programs.”
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