online retailing founded 2008 founder juha koski & daniel rovira & madhur srivastava headquarters london united kingdom area served united kingdom ireland france spain italy germany netherlands india austria poland turkey canada australia & united states products e commerce online auction with earned discount feature revenue 0 million 2012 website madbid.com madbid is a gamified ecommerce and online auction website registered under marcandi ltd. in the united kingdom . founded in 2008 by juha koski madhur srivastava and daniel rovira . the company operates in ten european countries including the uk ireland spain and france as well as the united states canada and australia . skype founders venture capital firm atomico in 2010 invested over 4 million 6 million in funding for madbid . 1 2 3 contents 1 business model 1.1 bidding 1.2 buy now 2 awards 3 history 4 revenue 5 criticism 6 see also 7 references 8 external links business model edit madbid s core business model began as a penny auction and the company has since added additional ecommerce features including a buy now option to purchase products outright as well as an earned discount feature that allows consumers to apply the cumulative value of bids placed which did not result in an auction win towards a discount for products the discount remains available for 365 days after the auction closed . most buy now auctions on madbid have a price comparison tab so that shoppers can compare against selected online retailers . 1 4 5 6 bidding edit the pay to bid auction process employed by madbid is based on users buying credits which allow them to place bids in auctions . users must purchase these credits before participating . credits are sold in different bulk amounts and cost between 10p and 12.5 p. however the effective credit value is significantly lower due to offers and to won credits and credits purchased in buy now . the number of credits to place a bid on each auction varies ; smaller auctions require two credits for every bid placed while larger and more popular auctions can use up to fifteen credits . 1 4 5 every bid placed raises the auction price of an item by 1p and at the same time extends the closing time of the auction by up to 60 seconds . 7 the auction closes when time runs out and the last bid wins the right to buy the item for the final auction price plus any processing and shipping costs . the final auction price is incremented by 1p for every bid placed during the auction . the net result is those who did not win paid for a number of bids and receive nothing though the amount paid does count towards the earned discount the winning bidder has paid for their bids and will still need to pay the final auction price plus p & p. in one example for a television with an rrp of 450 which cost four credits per bid the winner spent 217.60 on bids plus the winning price and p & p all other bidders paid and did not win the item the highest of those paying 211.60 the other bidders paid much smaller amounts . in total madbid received 612 for the item . 4 in a more recent example for a circa 600 laptop madbid could have received around 14 000 in bids assuming the cost of bids was equal for all participants . 8 buy now edit madbid offers a buy now option where users can purchase most items without needing to take part in an auction . additionally credit accrued from bids placed on auctions which weren t won earned discount can be used to reduce the cost of buy now . the true worth of this discount is debated as in instances the base madbid price is claimed to be significantly more expensive than other online shops . 8 in one example a toaster listed with rrp of 79.99 was listed for buy now at 49.38 delivery whereas the same toaster was available elsewhere online for 25 with free delivery . awards edit the guardian included madbid as part of their 2010 tech media invest 100 list . 9 the company was a finalist for the 2011 ecommerce expo s site innovation award 10 and in 2012 they were finalists for the red herring 100 europe award in the entertainment & media section . 11 later that year the company was nominated for the small online business of the year award at the orange national business awards . 12 the sunday times also listed madbid 41st in the 2012 tech track 100 league table . 13 history edit madbid was founded as a bootstrapped startup by juha koski and daniel rovira during 2008 . after growth fueled by a 2009 seed round the partners in 2010 raised 4 million equity financing in a series a venture round from skype and kazaa founders venture capital fund atomico ; the funding was aimed towards a europe wide roll out of services . 14 15 marcandi the company that operates madbid is owned by jersey based keyword group ltd. 8 revenue edit madbid s sales grew 71 % a year from 1.5 million in 2009 to 7.5 million in 2012 and the company reported a 2011 turnover of around 15 million . 14 15 16 the site had over three million registered users and a million weekly unique user page views in 2012 up from 1.6 million users in 2011 . 3 madbid also saw a 219 % click volume increase from its 2010 volume of 60 000 70 000 . 17 the final closing price is usually lower than the product s recommended retail price but not always cheaper than conventional retail channels . 8 madbid earns a profit if the revenue from bids placed and the final price are greater than cost price plus operating costs . as madbid can earn up to around 2.00 for every penny in price increase an auction that reaches 10 could earn the company close to 100 . in 2010 madbid reported that they profit on only 30 % of sales but that those profits exceed any losses on the remaining 70 % current figures are unreported . 1 criticism edit mark d. griffiths professor of gambling studies at nottingham trent university has repeatedly called for more regulation of sites like madbid but the uk s gambling commission has stated that it does not believe that such sites involve gambling and while the office of fair trading has worked against other sites which utilise automatic bidding against customers it says it has nothing to add to the work already done . 3 4 18 in recent times after evaluating their business model madbid has switched from a business model that focused on penny auctions to one that focuses on gamified ecommerce . due to the possibility of participants losing an auction some analysts have criticized the model or compared it to gambling even when operating without fraud . 19 20 21 22 23 the better business bureau has stated that not all penny auction sites are scams and to know exactly how the bidding works set a limit for yourself and be prepared to walk away before you go over that limit . 24 the washington state attorney general s office studied the bidding fee scheme and concluded that it does not constitute gambling under its state laws . it is now studying whether or not such penny auctions constitute a lottery . 25 the guardian exposed irregularities across three madbid markets usa uk and europe where the prices successful bidders were shown to have paid were inaccurate . a fiat car was shown as having sold for 193 193 and 193 in its respective markets an ipad for 34.40 34.40 or 34.40 and a camera for 23.94 or 23.94 . due to the concept of exchange rates at least 2 out of the 3 claims were definitely incorrect . madbid s explanation was that bid winners from each of the madbid sites are automatically displayed across the three sites . however the software that drives this is not sophisticated enough to deal with the currency conversion and interest rate variables between the pound dollar and euro . to simplify matters the price is paid is sic consistent across the sites . 8 the guardian also claim that winners of auctions may pay considerably more for their goods than had they purchased them through conventional retail channels using the example of a toaster with rrp of 79.99 that sold for 36.27 plus 8.99 delivery but was available for 24.99 delivered from another website . the price paid by the winner excluded the cost of bids . 8 see also edit online auction e commerce penny auction gamification references edit a b c d colmenares alan july 26 2010 . skype founders place 6 million bet on madbid.com . venturebeat . retrieved august 20 2012 . butcher mike july 26 2010 . madbid secures 4m funding . techcrunch.com . retrieved august 20 2012 . a b c feature . management today . october 31 2012 . a b c d king mark january 28 2012 . penny auction sites can leave a hole in your pocket . the guardian . retrieved 9 march 2015 . a b natalie vincent february 3 2014 . madbid review pdf . watch my wallet . retrieved 9 march 2015 . new feature alert earned discount . madbid.com . october 11 2013 . retrieved 9 march 2015 . http www.theguardian.com money 2012 jan 28 penny auction websites a b c d e f http www.theguardian.com money 2015 may 15 madbid discount auction website most complained company the guardian september 13 2012 . tech media invest 100 . the guardian . retrieved august 23 2012 . ecommerce expo awards . ecommerce expo awards . 2011 . retrieved august 23 2012 . red herring europe finalists . red herring . 2011 . retrieved august 23 2012 . national business awards . orange national business awards . retrieved august 20 2012 . tech track league top 100 2012 . the sunday times . retrieved november 23 2012 . a b ben lobel 8 december 2011 . lots of potential . growthbusiness.co.uk . retrieved november 23 2012 . a b bidding for success . small business uk . 15 november 2011 . retrieved november 23 2012 . rank 41 madbid.com . the sunday times . retrieved november 23 2012 . pay per click case study madbid . topclickmedia . retrieved november 23 2012 . pennells sarah december 20 2008 . penny auctions under scrutiny . bbc news . retrieved august 20 2012 . profitable until deemed illegal . coding horror . retrieved 25 november 2014 . gimein mark 2009 07 12 . the big money the pennies add up at swoopo.com . the washington post . retrieved 2010 04 26 . http www.codinghorror.com blog archives 001261.html http technologizer.com 2008 09 17 is swoopo nothing more than a well designed gimmick an ipad for 2.82 or illegal gambling bbb names top ten scams of 2011 zimmerman ann . penny auctions draw bidders with bargains suspense . the wall street journal . missing or empty url help ; access date requires url help external links edit official website retrieved from https en.wikipedia.org w index.php title madbid & oldid 730045136 categories english brandsinternet properties established in 2008multinational companies based in the city of londononline auction websitesonline retailers of the united kingdomprivately held companies of englandretail companies established in 2008hidden categories pages using web citations with no urlpages using citations with accessdate and no url navigation menu personal tools not logged intalkcontributionscreate accountlog in namespaces article talk variants views read edit view history more search navigation main pagecontentsfeatured contentcurrent eventsrandom articledonate to wikipediawikipedia store interaction helpabout wikipediacommunity portalrecent changescontact page tools what links hererelated changesupload filespecial pagespermanent linkpage informationwikidata