Pirq Adds $1.9M from Rally Capital
Kirkland, WA-based digital discounts startup Pirq has raised $1.95 million from Rally Capital, the venture firm headed by former Nextel CEO Dennis Weibling. Pirq is led by CEO James Sun, an entrepreneur best known for appearing on the NBC program “The Apprentice” with Donald Trump.
Sun says the money will be used to expand Pirq’s employee base by adding developers and sales staff to its team of about 30 people. Pirq offers an iPhone and Android app that lets users get real-time coupons from places to eat or drink in their area. But it doesn’t work on a group-buying model like deals-industry leaders Groupon or Living Social.
Instead, Pirq installs a software program that monitors the ebb and flow of business and allows restaurants, coffee shops, and other vendors to offer special prices during slow times to get people in the door.
Sun says that’s proven popular with clients like Zoka, a Seattle-area coffee shop that uses Pirq’s service. Sun says Zoka had run a Groupon offer before, but was inundated with customers all at once, irking both the deal-seekers and the regulars who had to stand in a big line. Pirq is intended as a more nuanced way of using coupons to fill in gaps in the business.
Interestingly, Sun says there is still a good amount of early stage investor interest in startups considered part of the “deals” phenomenon, even after Groupon’s sometimes-wobbly IPO and questions over the sustainability of the fast-growing businesses. In fact, Sun says, Pirq chose to do a smaller round with local investors even though some notable (but unnamed) names in California were interested. That gives the startup, which is currently earning revenue, the potential to raise more money later at a higher valuation, Sun says.
That reminded me of some recent comments from Martin Tobias, the CEO of Seattle’s Tippr, who thinks that local deals done right still have a lot of future because they are finally delivering on the promise of online advertising for small, service businesses.
“In the valley, they’re still very bullish on this whole idea of deals and local—especially if you’re playing in mobile commerce,” Sun says.
You can see on the SEC form that Pirq’s parent company, GeoPass, was considering investments of up to $5 million before settling on the just-under $2 million figure from Rally. Pirq is a joint venture with Passport Unlimited, a company that offers discount memberships at higher-end restaurants. Passport Unlimited’s Roger Blier is Pirq’s chairman.
Pirq currently only operates in the Seattle area, but plans to reach into more markets soon, and could add verticals beyond restaurants and other hospitality businesses in the next year or so. Sun wouldn’t discuss any download numbers, but said that Pirq’s goal is to get about 100,000 downloads whenever it enters a market. The startup currently has about 170 merchants signed up in the Seattle area, he says.