Philadelphia Business Journal | Peter Key | December 21, 2012
Ned Moore has gone from one of the driest and least public areas of software development to one of the most interesting and visible.
Moore was the CEO of Portico Systems Inc., which developed software used by health insurers to manage their dealings with health-care providers.
That’s not a sexy business, but Portico’s investors didn’t mind. The company, which was based in Blue Bell, was bought last year by McKesson Corp. for $90 million, including $5 million that was contingent upon it meeting performance milestones.
Now, Moore is the chairman, CEO and one of three co-founders of Clutch Holdings LLC, which earlier this month launched a multifunction mobile-commerce app. Consumers can use it to shop, participate in merchant loyalty programs and redeem gift cards. They can also post information from it to Facebook.
“If Pinterest was to get together with Facebook and Amazon, we would probably be the child of that situation on the mobile device,”
Clutch’s technology and strategy were developed over the past five years by Skepsu LLC. That company’s co-founders, Andy O’Dell and Dan Guy, co-founded Clutch along with Moore and are, respectively, Clutch’s chief commercial officer and chief technology officer.
Moore said he had always been interested in mobile technology and, after Portico was bought in July 2011, “came across Andy and Dan who had developed some technology and were figuring the best way to position it.”
Ben Franklin Technology Partners of Southeastern Pennsylvania last month approved Clutch for a $200,000 investment. Moore said the company has raised additional money from some well-known angel investors, but wouldn’t say how much or name the investors. He also said he has provided some funding for Clutch himself.
Clutch’s app is designed to appeal to consumers by letting them use just it, rather than multiple apps, to perform a variety of e-commerce functions, and by giving them access to deals that are relevant to where they’re shopping and what they’re considering buying. It can serve up information based on the location of its users and display relevant information when users call up the names of products or brands they’ve saved in it.
“If you’re searching for information, it’s right there at your fingertips,” Moore said.
The app is intended to appeal to merchants and manufacturers by giving them an easier way to reach consumers than creating their own apps and by enabling them to provide consumers with targeted information when the consumers are about to make a purchase.
It also allows merchants and manufacturers to keep track of who has possession of outstanding gift cards, enabling them to market to those people and to reduce the chance of the cards not being used.
The former is important because people redeeming gift cards typically spend four to seven times the card’s value, Moore said.
The latter is important because some states, including New Jersey and, with some restrictions, Pennsylvania, declare gift cards to be unclaimed property if they’re not used in a specified period after they’re issued and require the issuers to pay them the amounts left on the cards.
“We solve that problem because we know who owns the card at all points in time,” Moore said.
Clutch generates revenue when people use its app to buy gift cards and redeem offers. To date, most of its arrangements with merchants and manufacturers are not direct ones, but Moore said it plans to try to change that next year.
Not having many direct relationships with merchants and manufacturers hasn’t stopped the company from getting goodies for its app’s users. When it launched the app on Dec. 6, Clutch said the app supported hundreds of merchants and brands and aggregated more than 100,000 deals, offers and rebates daily.
Clutch timed the launch of the app to the start of the holiday shopping season, but just far enough past Black Friday and Cyber Monday that it wouldn’t get buried in the blizzard of publicity around those days.
Among other things, it’s touting the app as good for procrastinators.
“You can [use it to] electronically buy a gift card and send it and send along a video if you want,” Moore said. “You can personalize it with a video or a picture and you can buy pretty late in the game and still get that done instantly.”
Shopping apps are seeing wide use. Forty-seven percent of smartphone owners used them at least once in June, according a post on The Nielsen Co.’s blog in August. The three most widely used, by a sizable margin, were the apps from eBay, Amazon and Groupon, although two retailers — Walgreens and Target — also had apps among the 10 shopping apps used the most in June.
Andrew B. Morris, a principal in inCode Consulting Group’s mobile commerce practice, said Clutch’s success will be predicated on whether consumers find using its app easier than using single-function or single-brand mobile-commerce apps and whether merchants and manufacturers will give up the control they get from having their own apps in exchange for the peace of mind they’ll get from not having to worry about developing their own apps and keeping them up to date.
What’s likely to happen, he thinks, is that some consumers and merchants and manufacturers will embrace Clutch — and similar apps that come on the market — and some will continue to use and issue single-function or single-brand mobile-commerce apps, just as consumers pay some bills online by going to the individuals billers’ websites and others by going to centralized sites, such as the ones operated by their banks.
“I think this is going to work the same way,” he said. “The retailers are going to have their own apps … [and] there also will be customers who prefer that integrated experience and in order for retailers to reach them, they’re going to have to participate in something like Clutch.”