A gateway for Generation “Y” shoppers who talked their parents into establishing a credit card account on the site, RocketCash announced Wednesday that it secured $8.2 million (US$) in a second round of equity funding.
The privately owned Saratoga, California-based company said investment firms Sierra Ventures and Interwest Partners were the primary investors. They were joined by a number of private investors, including the founder of Intuit, the founder of 3Com Corporation and the former COO of Hewlett-Packard.
“RocketCash is clearly establishing a significant new segment in the e-commerce arena that we expect will have an extensive and long-term impact,” said Philip Gianos, general partner of Interwest Partners.
RocketCash is a gateway site that allows teens without credit cards to shop on the Internet — with their parent’s permission of course. The site uses Chase Manhattan Bank-issued Visa credit cards to complete transactions with participating merchants.
Amazon.com, Barnesandnoble.com, Beyond.com, CDNow and jcrew.com are a few of the merchants who’ve decided to sell their products on the RocketCash site.
Competing for Teens Pocket Cash
Founded last December, RocketCash claims to be the first site on the Internet to enable teens to buy online in a “safe, parent-controlled environment. That claim has been disputed in the past by iCanBuy.com, which itself says is the first to enable parents to set up an online account for their children.
The ‘who’s first’ tiff might be just semantics, but the potential of the teen market — as familiar with the Internet as the Baby Boomers were with yo-yo’s and Hula Hoops — makes it all business.
Teenage Research Marketing recently issued a report that says that teens spent $141 billion last year in the United States. Some $94 billion of that was their own money, the firm says. That means the majority of the remainder was their parents’ money – or approximately $47 billion if Teenage Marketing Services is anywhere near correct.
RocketCash says that only 1 percent of the money teenagers spent last year was spent online. The major impediment, of course, is that most e-commerce sites accept credit cards only. Thankfully for the national debt rate, teenagers are prohibited from owning credit cards for the time being.
It’s clear from the level of participation in RocketCash’s funding that some industry heavyweights believe that the company has opened the gate to a very large and eager shopping demographic.