IT, deals, debt

Jackpot Rewards Raises $12M

Wade Roush 10/16/09

Jackpot Rewards, a Newton, MA-based startup that runs cash-back rewards programs and sweepstakes for online shoppers, has raised just over $12 million in new financing in the form of convertible debt, according to regulatory documents filed today. We profiled the company in February 2008, when it first announced its plans to give away a $1 million jackpot every week; the company generated controversy later that spring by making the prizes much more difficult to win, a decision explained by CEO Jim Miller as part of a shift to an emphasis on the company’s cash-back rewards program. According to today’s filing, $250,000 of the debt-based financing will be paid to executives or directors of the company. Jackpot Rewards has raised at least $16 million in equity financing from a group of individual investors including former Fidelity Magellan fund manager Peter Lynch.

Wade Roush is Xconomy's chief correspondent. You can e-mail him at wroush@xconomy.com, call him at (617) 252-7323, or follow him on Twitter at http://twitter.com/wroush.