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eCoupon verification startup ZenDeals makes unredeemable codes a thing of the past

A major headache for e-commerce retailers and online shoppers alike looks set to be consigned to history, thanks to the launch of eCoupon-verifying startup, ZenDeals.

A solution for the eCoupon headache

There’s a big problem with eCoupons.  While 88 million Americans used them in 2011 alone, as many as 76 percent of them don’t work because they’ve become invalid.  It was a frustration like this that led ZenDeals co-founder Christopher Couhault and a group of his buddies to hatch their new idea.

He’d been asked by his wife to buy baby diapers online, but when he went looking for coupons to lower the price, he could find none that were currently valid.  He and a bunch of friends (all of whom are fellow co-founders) set about testing 30 different coupons before they finally found one that was actually redeemable.

The reasons why there are so many invalid eCoupons are legion.  Promotions linked to specific coupons may expire, they may have been issued by retailers as single or limited-use codes that go dormant after use, or they might have conditions attached, like only being valid on a certain day of the week.  All of which add up to throbbing veins in the temples of e-commerce managers, e-commerce analysts and shoppers alike.

A giant market awaits

The firm has spent the last eighteen months using the rumored $1 million+ it raised in seed funding to develop technology capable of aggregating, algorithmically verifying and delivering quality, redeemable coupons from dozens of eCommerce giants to online shoppers.  Sites include leviathans like Amazon, Macy’s, Gap and Target, while investors include (unnamed) executives from Facebook and Zynga, as well as Innovation Endeavors.

However, developing that technology hasn’t been an easy process – hence the 18 month run-in to market.  But now the Silicon Valley based startup’s combination of cloud computing and machine learning algorithms means that it has been able to validate five million coupons and codes since beta testing began earlier this year.  It currently tests thousands every day.  Each coupon is tested several times a day to make sure the data is still fresh and usable.

ZenDeals takes a small commission from retailers and publishers for each coupon it verifies.  But with 88 million coupon users out there, this little venture looks set become big business very soon.

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