It’s been just one year since Solavei emerged on the scene with a referral-based marketing approach for selling cellular service, tapping into its users to help spread the word on the $49 per month plans.
And now we’re getting a glimpse into the success that the controversial and heavily-funded company — led by former Motricity CEO Ryan Wuerch and backed by the likes of former AOL CEO Jonathan Miller, Amazon Kindle VP David Limp and others— has achieved in the past 12 months.
The company, which piggybacks on the T-Mobile network and allows users to earn free cellular service plans by signing up friends, co-workers and family members, said that it has attracted 250,000 members since its launch last September.
It is also on a annualized revenue run rate of $67 million, based on revenue figures from Sept. 2013. Today, the company is launching a new program in partnership with First Data to build on that momentum, a new marketplace for products and services beyond cellular service.
Earlier this year, Fierce Wireless reported that Solavei was looking to top $100 million in revenue in its first calendar year, so the $67 million run rate indicates that it is a bit behind those goals.
Still, a $67 million run rate for a company that’s been operating for 12 months is nothing to sneeze at. (By comparison, Zulily, which just filed to go public, posted revenue of $18.3 million in its first year). (Editor’s note: This post has been adjusted to better reflect the time period of the revenue run rate).
The new Marketplace program is being launched in partnership with First Data, marking a new way for Solavei members to market everything from high-speed Internet to cable plans to financial services to household goods. In each case, there will be a referral compensation model attached, a concept which has drawn the ire of some who negatively view business models in which members are rewarded for signing up acquaintances.
“The explosive growth in our member base in our first 12 months validates our business premise and belief that social commerce will redefine distribution in the coming years,” said Wuerch, founder and CEO of Solavei. “We’re making people’s everyday purchases more affordable by shifting the large advertising dollars usually spent by brands to our members —directly rewarding them for sharing the value of Solavei with their friends and family.”
Solavei has signed up 16,000 merchants, including Target, Old Navy, Subway and Starbucks, for the new marketplace program, with members able to use a Solavei card to purchase items at a discount. Furthermore, money is directly deposited on the Solavei card when members refer friends to a specific service or product, with those members then able to use the cards at ATMs and to make purchases anywhere Visa is accepted. Solavei members already have the cards, and have been receiving compensation when they use them.
The marketplace is a bold step by the company — which has raised $25 million in funding — to expand beyond its cellular service offering.