Durham startup that offers Bitcoin rewards for shopping gets backing from Serena Williams
A Durham startup that turns shopping rewards into Bitcoin is attracting some highly influential investors.
Lolli raised a $5 million round of funding this week. The round was led by Seven Seven Six ventures, the investment company founded by Alexis Ohanian, a co-founder of the social media site Reddit. Ohanian was joined in the investment by his wife, the tennis star Serena Williams.
The couple joins other well-known investors to pile money into the company. Lolli now has raised more than $8 million since it started in 2018, and previous investors include actor Ashton Kutcher, who has become a successful tech investor in the past decade.
Matt Senter and Alex Adelman, both graduates of Triangle universities, started Lolli as a way to boost interest in the cryptocurrency Bitcoin. Instead of a traditional cash-back rewards program that some retailers use, Lolli uses Bitcoin, the anonymous digital currency that has skyrocketed in value in the past year.
The company says it now works with 1,000 different retailers, like Nike, Sephora and Chewy, and has around 250,000 users. Lolli says its users have earned more than $3 million in Bitcoin rewards to date.
Those merchants pays Lolli in cash for referring customers to their platforms, usually through Lolli’s app or a Google Chrome extension, and then Lolli converts that cash to Bitcoin.
“The companies are fully aware that that’s our value prop,” Adelman told The News & Observer in an interview. “We basically do all the work, so they don’t have to. And so they can operate as they normally would and treat us like a cashback company.”
The company likes working with well-known investors, Adelman said, because they can then market the company to their vast followers. The company is also receiving investment, for example, from Night Media, a management firm that represents popular YouTube personalities like Mr. Beast.
On Twitter, Ohanian lauded the company to his more than 400,000 followers, saying the app could open up Bitcoin ownership to more people.
Lolli’s new round of funding will be used to hire more employees and help the company expand internationally. Adelman said the hope is to get to 1 million users soon.
Bitcoin becomes more mainstream
Adelman and Senter previously worked together on a mobile-shopping technology startup called Cosmic Cart, which was acquired by the content company PopSugar in 2016. That startup was then bought by the Chinese e-commerce giant Rakuten, when it bought PopSugar’s e-commerce platform in 2017.
Their time at Rakuten helped the two make relationships with thousands of different e-commerce merchants. Having those relationships and a years-long fascination with the idea of cryptocurrencies led to the birth of Lolli.
The company’s latest fundraise comes as Bitcoin has become a more mainstream asset class. It’s price per coin hit record highs this year, as large banks, like Morgan Stanley, began to offer clients access to it, and companies like Tesla began accepting it as payment and holding it on their balance sheets.
“Bitcoin is not going anywhere. Crypto is not going anywhere,” Adelman said. “It’s the absolute inevitable future, and you can quote me on that.”
The company’s founders previously floated between places like New York and San Francisco. Adelman said a concern over access to capital caused him to leave North Carolina originally. And he still has concern that the Triangle isn’t attracting the same type of attention of burgeoning tech cities, like Miami and Austin.
“On the investment side, there was no real access to capital in North Carolina,” he said. “So I had to get really good early on — this is like eight or nine years ago — at pitching investors and networking outside of North Carolina. That ultimately led me to move to New York and really split most of my time between San Francisco and New York.”
But Lolli stands to be centered around Durham.
It’s a homecoming of sorts. Adelman is a UNC-Chapel Hill grad, and Senter, who has been based in Durham longer, went to N.C. State University.
Prior to the pandemic, Lolli was being run from The Frontier co-working hub in Research Triangle Park. But since the pandemic has closed down offices, its 10 workers in the Triangle have been working from each other’s homes.
The company also has a small office of five employees in New York City. Adelman moved back to North Carolina from New York last year.
“During COVID, New York was not the best environment,” Adelman said.
But once vaccines become more widely available, the plan is to ultimately find a permanent location in Durham.
“I think we will have enough employees and demand that we would want office space,” he said.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published March 25, 2021 at 9:24 AM with the headline "Durham startup that offers Bitcoin rewards for shopping gets backing from Serena Williams."
