Xooker, the Lexington-based mobile marketing company with a funny name and colorful logo, is expanding regionally as part of a planned national rollout.
The company began doing business in Lexington 17 months ago after two years of development and testing. It launched in Louisville in January and will begin Cincinnati operations within 75 days, said Conrad Carney, the chairman and CEO.
Xooker plans to add Nashville in the third quarter, and within the next year expand to Cleveland, Pittsburgh, Columbus, Indianapolis, Knoxville, Charlotte and Raleigh.
Within 36 months, Carney expects the 17-employee company to grow to 300 people at the headquarters in Perimeter Center. Dozens of desks are already in place, and he said Xooker has an option on more space in the building at Alumni Drive and New Circle Road.
Xooker is working with New York investment banker Maxim Group on an offering through its new digital platform, M-Vest. Carney said Xooker will be the first tech company M-Vest has done. He hopes to raise $5 million initially and, over the next year or so, as much as $25 million for a national expansion.
Carney said he and other initial investors have put more than $6 million into the company’s development. By the end of this year, he expects Xooker to have annualized revenues of $1.3 million.
Xooker has gotten some attention in technology industry media because of its ability to quickly attract businesses and customers to its smartphone marketing platform. It also has partnered on cross-promotions with others, including HL Media, which operates Kentucky.com and the Lexington Herald-Leader.
The company now has 758 business partners with 1,206 locations in Lexington, plus 426 with 691 locations in Louisville. Xooker's free app has been downloaded more than 30,000 times. But Carney said that what is getting the industry’s attention is the app’s high level of engagement among users.
“That's been a major factor in mobile; how do I keep you engaged outside of the point when you're in the store,” Carney said.
If you allow the app to track you, it will “check you in” and offer deals on your phone when you enter a participating store. Carney said no personal data is shared with merchants or third parties.
Carney said he chose the company’s name — pronounced “Zooker” — to attract attention.
“I wanted something that was unique, that was self-defining,” he said. “A lot of people say, ‘How do you pronounce that?’ In marketing, if I can get you to break your preoccupation and bring focus to our product, we’ve won.”
While the app offers merchant coupons and discounts, the company has boosted engagement mainly with in-app games by the Lexington-based game developer Super Soul. Other parts of the app were developed by another Lexington tech company, Fusioncorp.
“Every time you play a game you get points you can use as rewards to get additional discounts from merchants,” said Vince Edwards, Xooker’s chief marketing officer. There also are daily prizes. All services are free to app users.
Carney has been involved in the mobile phone industry since 1987, when he graduated from the University of Kentucky, where he played football. He first worked for Cellular One, then started CMS Text, an early text-message marketing company. He has long thought mobile marketing was the wave of the future.
“That’s because you never leave home without your phone,” he said. “Since it is so indispensable to the consumer, it really becomes the best form for the advertiser, to go right to the palm of your hand.”
Xooker is based on a “freemium” model, where businesses can sign up for basic promotions for free in return for cross-promoting Xooker. More services, such as customer loyalty programs, are available in monthly packages ranging in price from $69 to $399.
Xooker’s technology allows merchants to get full reports on the effectiveness of their discounts, showing how many users look at promotions, save them in their digital “wallet” and redeem them.
Although its partners include big companies such as Sleep Outfitters and the Quantrell auto group, Xooker is focused on small and medium-size businesses, especially single-location “mom and pop” shops. “They know they want to market to your mobile phone, but they just don't know how,” he said.
Selma Sulejmanagic, who with her sister, Alma Kajtazovic, opened Sorella Gelateria at 219 N. Limestone St. more than two years ago, has been using Xooker’s free services and been pleased.
So far, the shop’s discount offers have been paid for by Xooker, which bought $250 in gift cards. “We’ve had some new customers pop up from it,” she said.
As businesses start to see benefits from free promotions, Xooker hopes they will invest in more services. That’s where it will make money.
“We're true partners,” Edwards said. “We support loyalty towards them, and they support us by marketing for us.”