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Mall Networks Secures New Financing From IDG Ventures, The Venture Capital Fund Of New England And LBO Enterprises
Affinity Marketing, Consumer Loyalty and Financial Services Industry Pioneer Carl Novotny Joins Company’s Board of Directors
LEXINGTON, Mass. – Oct. 23, 2006 – Mall Networks, the company that connects top online merchants to the universe of consumer rewards programs, today announced it has completed its second round of private equity funding. The Venture Capital Fund of New England (VCFNE) led the round with existing backers, IDG Ventures Boston and LBO Enterprises, increasing their initial investments.
Mall Networks will use its new capital infusion to support ongoing product development and marketing efforts, as well as to accelerate new client acquisition.
In conjunction with the investment, Carl Novotny, Managing Director at VCFNE has joined Mall Networks’ Board of Directors. Novotny joins Jeff Bussgang, General Partner at IDG Ventures Boston, and Les Otten, Vice Chairman and Partner of the Boston Red Sox, in this capacity.
“Merchant funded rewards programs, delivered through online malls, present a significant revenue generation and loyalty opportunity by allowing merchants to forge deeper relationships with millions of consumers,” said Dave Andre, President and CEO, Mall Networks. “Mall Networks’ new and existing board members and management team comprise what is arguably the strongest and deepest concentration of experience and talent in affinity marketing and consumer loyalty. We are thrilled to welcome Carl Novotny to our board and look forward to his guidance as we continue to grow our company.”
Founded in 2005, Mall Networks builds and manages online malls tailor-made for premier partners such as professional sports teams, credit cards and banks, rewards programs, and membership organizations. The company enables these organizations to enhance their blue-chip loyalty programs with an easy-to-navigate online mall through which members earn points with every purchase. National non-profits and charities also benefit from the company’s online fundraising mall, which integrates into existing websites without distracting from their central mission.
Carl Novotny, who joins the Mall Networks board on behalf of VCFNE, co-founded First USA Partners, a leading independent affinity marketing company in the U.S. in 1992. Previously, Novotny also co-founded Trans National Financial Services, which pioneered affinity marketing for financial services companies beginning in 1979. During his career, Novotny has developed and marketed affinity and loyalty programs for more than 3,000 member organizations on behalf of several leading banks and credit card issuers, including Bank One, First USA Bank and MBNA America.
“Merchant funded rewards programs are still rare in the credit card and debit card industries and Mall Networks has developed a turnkey solution that is sophisticated, secure, and specifically engineered to meet the requirements of the most demanding financial services clients,” said Novotny. “Our investment in Mall Networks is a natural extension of our previous investments in both direct marketing and one-to-one marketing companies and I am excited to join the Mall Networks board as it is poised for what we see as explosive growth.”
“Through client engagements with blue-chip organizations like the Arizona Diamondbacks, Los Angeles Dodgers, and NASCAR RacePoints, and by forging trusted partnerships with more than 350 of the world’s leading online merchants, Mall Networks has quickly proven its ability to significantly increase the value of consumer loyalty programs,” said Les Otten, an existing board member and early investor. “Carl Novotny’s addition to the board is another key milestone for the company. His expertise will help Mall Networks accelerate client acceptance of their online malls and further build and enhance customer loyalty for the world’s leading brands through online shopping.”
About VCFNE
The Venture Capital Fund of New England was organized in 1982 to provide equity capital and management assistance to emerging growth oriented companies in the areas of industrial and information technology and direct marketing programs. VCFNE IV, its current investment fund, focuses on New England-based companies and has committed capital of $75 million thus far to 25 different venture-backed companies, many of which focus on affinity and loyalty marketing and marketing information services. For more information, visit www.vcfne.com.
About LBO Enterprises
LBO Enterprises is an investment firm whose partners include Les Otten, vice chairman of the Boston Red Sox. Otten is the founder and member of the board of directors at American Skiing Company, the parent company of several alpine ski, snowboard and golf resorts. Otten is widely considered a marketing visionary who introduced loyalty marketing to the ski industry nearly twenty years ago. Otten is also Chairman of Sport Loyalty Systems, which designs, operates, and markets loyalty programs for professional sports leagues and their franchises.
About IDG Ventures Boston
IDG Ventures Boston is an independent partnership that enables entrepreneurs to grow innovative, global companies. With $280 million under management, the firm is focused on investing in early stage information technology and life sciences companies and is led by a team with more than half a century of combined experience in venture capital. IDG Ventures Boston is affiliated with the IDG Ventures network of funds, a global $1+ billion network of independently managed funds spanning Asia and North America. For more information, visit www.idgvb.com.
About Mall Networks
Mall Networks is the leading provider of online malls and loyalty shopping solutions that increase revenue, strengthen customer loyalty and improve member engagement for financial institutions, card issuers, loyalty programs and affinity organizations. Featuring an integrated network of more than 500 world-class merchants, Mall Networks’ flexible, on-demand platform powers personalized, easy-to-use online shopping portals for more than 25 million consumers. Industry leaders including JPMorgan Chase, Upromise, Spirit Airlines, NASCAR, Shop.org and First Equity rely on Mall Networks to build loyal, profitable customer relationships. Mall Networks is headquartered in Lexington, Mass. For more information, visit www.mallnetworks.com.
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Press Contact:
Amy Paladino
PalPR
amypal@comcast.net
781.772.1005
Kate Castle
IDG Ventures
617-534-1228
kcastle@idgventures.com
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