How Does ShopBack Make Money? Dissecting Its Business Model

Executive Summary:

ShopBack is a cashback platform that provides consumers with discounts and other monetary incentives when purchasing items from selected stores.

ShopBack makes money from affiliate commissions, advertising on its platform, and transaction fees. It operates an affiliate business model.

Founded in 2014, ShopBack has risen to become Southeast Asia’s biggest cashback rewards platform. The company now counts over 20 million members.

How ShopBack Works

ShopBack is a cashback platform that provides consumers with discounts and other monetary incentives when shopping at selected partner stores.

The company works together with hundreds of brands in a variety of categories, including Amazon, Apple, Shopee, Nike, Agoda, H&M, Foodpanda, and plenty more.

Apart from earning cashback rewards, users can also purchase items and services at various discounts using ShopBack’s promo codes.

On top of that, they can purchase gift cards and even compare prices across different platforms and brands.

Using ShopBack is as simple as it gets. Here’s how it works: first, you either navigate to the platform’s website or download its mobile app (available for Android and iOS devices). Alternatively, you can also install its Chrome browser extension.

You then browse through the various categories until you find something you like. Then, you simply click through to the partner’s site. Over there, you simply complete the purchase.

The cashback you’ve earned will then appear within your ShopBack account once you completed the purchase (and after the merchant confirms everything on their end). The cashback earnings can then be withdrawn into your bank or PayPal account.

ShopBack also works together with selected financial providers which provide you with cashback rewards when you use their debit or credit cards for in-store payments (called ShopBack Go).

Members, apart from earning rewards, can use ShopBack Pay to pay for goods and services at selected merchants.

Customers can either pay directly using their existing funds or take advantage of Shopback PayLater, which enables them to pay in 3 monthly instalments.

Detailing the Founding Story of ShopBack

ShopBack, headquartered in Singapore, was founded in 2014 by Henry Chan, Bryan Chua, Derrick Goh, Joel Leong, Lai Shanru, and Samantha Soh.

Almost all of the six founders met each other during their stints at Zalora, an online fashion retailer with a presence in Southeast Asia.

At the time, e-commerce across the Southeast Asian region began to take off. Foreign investors like Rocket Internet were launching companies left and right. E-commerce, with the emergence of Lazada, was one of the fastest-growing sectors.

Meanwhile, unlike in the UK or US, there wasn’t any meaningful way for Southeast Asian consumers to tap into cashback rewards and other means of savings. In the United States, for instance, Ebates (now Rakuten) had already been a dominant player for over a decade, generating hundreds of millions of dollars in revenue.

ShopBack became the answer with which they would capitalize on that market gap. Even before they officially launched, the team was already able to secure a seed round of $500,000 from Accel-X in April 2014.

They were able to do that not only because of the team’s extensive experience in the e-commerce industry but also because they possessed varying skill sets that would allow them to build and market the product.

Consequently, in late 2014, after months of hard work, they finally unveiled to the Singaporean public.

shopback company history
Wayback Machine

Over the course of half a year, the team was able to increase its merchant base from 100 at launch to over 300 by February 2015. Furthermore, more than 120,000 people were visiting ShopBack’s website every month.

The stellar growth was rewarded with another seed round of $500,000 (led by almost the same investors), which brought the firm’s total funding to $1.1 million. That same month, ShopBack expanded into Malaysia, its first foreign market. Soon after, in July, it also introduced its offering in the Philippines.

Given the firm’s rapid ascend, competitors soon started to emerge. Most notably, cashback site Ebates set up shop in Singapore in the summer of 2015 and launched a local competitor as well. In order to solidify its lead, ShopBack also launched in Indonesia around September.

Most of its growth in the early days either came through word of mouth or via its referral program, which would pay users a fee for bringing on their friends and family on the platform. After all, cashback (and online shopping at large) was still a fairly new concept in Southeast Asia, so the company had to conduct a lot of educating.

This went as far as Joel Leong’s parents asking him whether the company can even be profitable when it’s handing out ‘free’ money to customers.

Given that Southeast Asians conduct most of their day-to-day through their phones, ShopBack eventually unveiled its mobile app in June 2016. The app immediately shot up to the number one spot in Apple’s App Store.

A few months later, in October, ShopBack launched in Taiwan, its first expansion market beyond Southeast Asia. Joel Leong even joined a local startup accelerator named AppWorks and stayed in the country for over a year to better understand the market and tailor the product to the local needs.

By 2017, most of its competitors were either not relevant or had already shut down. In July, ShopBack doubled down on its market-leading position by launching in Thailand, its sixth overall market.

The firm’s growth was rewarded with a third round of funding. Investors poured $32 million into the company, which included backing from Australian venture capital firm Blue Sky amongst others. This wasn’t a coincidence.

Right after the funding was disclosed, ShopBack also announced that it would expand into Australia, its first non-Asian market. The platform office launched in Down Under in March 2018.

Furthermore, the capital injection also enabled ShopBack to make its first-ever acquisition. In May 2018, it bought Seedly, a Singaporean personal finance platform, for around $2.1 million. The acquisition game Shopback access Seedly’s much-coveted millennial demographic.

Lastly, the funding was also used to upgrade the platform’s suite of products. In July, it introduced ShopBack Button, a Chrome extension that would automatically scout the web for deals and cashback rewards. This was certainly a lucrative field to expand in, as Honey, a similar extension with roots in the United States, had managed to sell itself to PayPal for $4 billion.

On top of the Chrome extension, ShopBack also launched its GO product in December 2018. There, it partnered with local credit card firms to enable customers to earn cashback rewards when using their cards at selected partner stores.

As a result of all these growth initiatives (ShopBack saw 250 percent YoY growth in 2018), the company was able to raise another major round of funding in April 2019. This time, Rakuten Capital and EV Growth invested $45 million into ShopBack, which valued the company at about $113 million.

One of the ways in which it used that money was to expand into another market. This time, in December, ShopBack expanded into Vietnam where it would mostly compete with local players like, Putatu, and

However, 2020 would prove to be an even better year, which admittedly didn’t start off too well. The majority of the firm’s travel revenue, after the coronavirus forced Asia and the rest of the world into strict lockdowns, essentially disappeared overnight.

On top of that, partners like Lazada and Shopee temporarily halted their partnerships as they didn’t rely on ShopBack for promotional purposes since customers were accessing their platforms directly. Luckily, they quickly returned again, which allowed ShopBack to take advantage of the unprecedented growth in the e-commerce sector.

Consequently, in March 2020, ShopBack was able to extend its $45 million round (raised in April 2019) and add another $30 million to its balance sheet.  Its Australian business, in particular, was blossoming. Competitors like Coles and Woolworth suspended their own cashback programs due to supply chain shortages, which consequently benefitted ShopBack.

The funding, furthermore, allowed ShopBack to make another major acquisition. In April, it purchased Ebates Korea and rebranded it as ShopBack Korea. Unfortunately, not everything was going super smooth.

In September, the firm suffered a data breach that exposed 5.2 million user records, including emails and passwords, and put them up for sale on the darknet. ShopBack also sold off Seedly to CompareAsiaGroup for over $6 million in October 2020.

Investor confidence remained as high as ever, though. Throughout 2021 and 2022, ShopBack managed to raise $120 million in venture funding.

The company used portions of that money to scoop up other companies, too. In November 2021, for example, it acquired BNPL service Hoolah, which it used to launch its own solutions 8 months later (07/2022).

A month after the launch, ShopBack announced its expansion into Hong Kong while completely rebranding the site in the 10 markets it was active before.

How Does ShopBack Make Money?

ShopBack makes money from affiliate commissions, advertising on its platform, and transaction fees.

Let’s take a closer look at each of these revenue streams in the section below.

Affiliate Commissions

The majority of the revenue that ShopBack generates comes from affiliate commissions (also called referral fees) for purchases made through its platform.

The referral fee is a percentage of the overall purchase price and, in the case of ShopBack, can vary between 0.5 percent to 10 percent.

The actual percentage share is dependent on the product category, with electronics normally being on the lower and fashion on the higher end.

ShopBack then shares a portion of those commissions with the customer in the form of cashback rewards. Similarly, it also receives a commission whenever you use a discount code.

In some instances, ShopBack also works together with so-called affiliate networks like Commission Junction or Access Trade which provide it with additional brand partnerships. Consequently, it also has to split the revenue with these networks.

From a brand’s perspective, there are a few advantages as to why they would work together with ShopBack.

First, they only compensate ShopBack if a successful sale is made. As such, they don’t have to commit millions of dollars on platforms like Google or Facebook just to attract clicks.

Second, ShopBack can provide these partners with an audience that knows its platform and values it for the deals it can provide. This, in turn, often increases readiness to purchase.

Third, brands can simply acquire new customers they previously wouldn’t have been able to attract. They can then capture information like their emails or other contact data to eventually retarget them with new offers.

Generating affiliate commissions is how all cashback platforms make money, whether that’s Groupon, Rakuten, Honey, or newcomers like Fetch Rewards.


Another, albeit smaller, stream of income comes from brands advertising themselves on ShopBack’s various platforms.

For instance, ShopBack can place a banner on its homepage which highlights a certain brand, its offering, as well as ongoing promotions.

These brands then pay ShopBack a fixed fee for the duration of the campaign. These forms of advertising are often used by brands that started to expand into Southeast Asia.

Given that ShopBack attracts tens of millions of visitors every month, advertising on its website or app can certainly be considered valuable advertising real estate.

Transaction Fees

The last source of revenue comes from the various transaction fees that ShopBack collects for using its payment services.

ShopBack, as stated above, offers two solutions, namely ShopBack Pay and PayLater. With the former, members in Australia and Singapore can pay for goods and services at over 4,000 stores using a single QR code.

The payment is then settled using the funds that a user holds in his or her account. Consequently, ShopBack collects transaction fees, which are paid by the merchant accepting the payment.

Unfortunately, the fee structure is currently not disclosed but is likely in line with what payment competitors like Grab or Shopee charge.

The second fee that ShopBack collects is paid by PayLater customers who are overdue on their payments.

If customers pay back on time, then there are zero fees applied nor interest being charged.

However, ShopBack does apply an undisclosed late payment penalty for users who do not pay on time.

The ShopBack Business Model Explained

Generally speaking, ShopBack operates under an affiliate business model, meaning it pockets a commission in exchange for promoting a product or service.

However, ShopBack has gone a long way from being a website that just lists coupons for people to redeem.

Historically, the company first expanded horizontally into new markets such as groceries (e.g., ShopBack Mart).

Expanding horizontally made sense since the technology stack that ShopBack had developed could be easily deployed across a variety of different industries.

And the more partners ShopBack onboarded, the greater its attractiveness to members.

ShopBack, by partnering with as many merchants as possible (and thus offering more redemption opportunities), increased the value it could derive from both its members and partners.

Consequently, ShopBack became the de-facto leading cashback rewards platform within the APAC region.

It then utilized its market-dominating position to vertically expand into new product lines. The first of those became its Honey-like browser extension, which enables users to earn rewards during check-out.

ShopBack’s ecosystem of products has since been extended towards payments with the launch of Pay and PayLater.

The business model strategy that ShopBack seems to pursue is thus based on maximizing consumer touchpoints by enabling them to earn rewards on every payment imaginable.

Facilitating payments is a logical extension of that purpose. Offering payment solutions also enables ShopBack to collect more data points about its members, which it can utilize to provide them with better cashback recommendations.

Merchant partners will also benefit since ShopBack can provide them with greater transparency regarding the performance of their campaigns. A stronger ecosystem will also increase ShopBack’s bargaining power, which would lead to higher earned commissions.

In order to succeed in its payment efforts, ShopBack will need to continue expanding its partner base so that consumers can use its payment solution whenever they shop.

However, ShopBack may be, such as in countries like Malaysia, limited by the need for regulatory approval.

Doubling down on its payment initiatives will remain at the core of ShopBack’s business model strategy for the upcoming years. Additionally, with 35 million current members, there’s still a lot of room for ShopBack to grow in its core Southeast Asian markets.

ShopBack Funding, Revenue & Valuation

ShopBack, according to Crunchbase, has raised a total of $355 million across 9 rounds of funding.

Notable investors include Rakuten, Temasek Holdings, EV Growth, SoftBank Ventures Korea, 33 Capital, Cornerstone Ventures, and many others.

Shopback is currently valued at $900 million (post-money) after raising $80 million in Series F funding back in October 2022.

For the fiscal year 2021, ShopBack generated $40.1 million in revenue based on filings with Singaporean regulators.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.