The ShopBack Business Model – How Does ShopBack Make Money?

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 as well as by offering advertising solutions to other brands on its platform. It operates an online marketplace 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 The cashback earnings can then be withdrawn into your bank or PayPal account.

Lastly, 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).

ShopBack Company History

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 across 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 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 the team all had experience in the e-commerce industry but possessed varying skill sets that would allow them to build and market the product. 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 its 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.

As a result, 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.

Today, ShopBack employs over 500 people across offices in all of the markets that it currently operates in. The platform serves over 20 million customers in nine countries.

How Does ShopBack Make Money?

ShopBack makes money from affiliate commissions as well as by offering advertising solutions to other brands on its platform.

ShopBack essentially operates an online marketplace as its business model. The company matches sellers (here: brands) with customers wanting to receive cashback rewards and other types of discounts.

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. In that case, 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.


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.

ShopBack Funding, Revenue & Valuation

According to Crunchbase, ShopBack has raised a total of $113 million across six rounds of venture capital funding.

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

As a private enterprise, ShopBack is not obligated to disclose revenue or valuation figures to the public.

However, reporting from TechInAsia indicates that the company is currently valued at around $500 million while it generated $75.8 million in revenue for the fiscal year 2020 (compared to $28.4 million the year prior).

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.