TapOnIt: Sisters generate deal to push startup beyond Iowa

TapOnIt Katie Wilson (left) and Sara Castillo (right) launched TapOnIt in 2015. This month, they closed a deal with New Media Investments.

Sisters Katie Wilson and Sara Castillo flew to New York City last December searching for further funding for their Quad Cities-based company, TapOnIt.

“Being young women in tech is a very interesting space to be in,” Castillo said. “… A lot of people have said ‘Oh, what a cute hobby.’ So, it felt good going out to New York.”

After meeting with investors, Wilson and Castillo got an offer from New Media Investment Group Inc. before they left New York.

New Media Investment Group announced on Feb. 1 they acquired a 20 percent equity stake in TapOnIt. A term in the New Media Investment acquisition involves keeping the financial terms of the deal confidential. 

The investment will help TapOnIt expand their reach beyond Iowa.

Explaining TapOnIt

TapOnIt is a text-based advertising platform that gives users offers from local businesses right to their phone.

“What we do in the simplest of forms is we build databases of people who 100 percent sign-up, opt-in for to receive offers and promotions from local businesses,” Wilson said.

Once consumers opt-in to the system, they receive deals from local businesses up to three times a week. Usually the offers are based in food or beverage, but Wilson and Castillo say they have been able to drive direct traffic for most businesses.

“We make sure these are offers that are good enough to make people go out of their way to try something new,” Castillo says.

Challenges faced

Being female in the startup community has been a challenge for both Wilson and Castillo.

“It has not been easy trying to establish ourselves,” Castillo said. “From the moment we started this company, we never had a plan for it to be a lifestyle company. We always from day one had it planned that this was going to be a huge blow it out of the water company.”

But in trying to do so, people did not always see their idea as legitimate.

“Our hardest thing was just trying to make people see what we are doing is really cool and its working,” Castillo said. “It is driving awesome traffic to businesses and the consumers are happy, but people didn’t always take us seriously.”

Clearly, they have not let this hinder their growth.

“We are very, very blessed that it has turned into what it has and it will continue to grow because most companies fail,” Castillo said. “We are three years in, and we just hit the beginning of the growth that is going to take us further and further and further. The fact that we have made it this far is pretty darn great.”

Establishing a startup in Davenport was also a bigger challenge than they expected because there isn’t a huge tech community in the Quad Cities.

Wilson and Castillo said at times people questioned why they stay in Iowa, when they could move to the Silicon Valley or New York City.

“Iowa is our home,” Castillo said. “It has been really good to the start of the business. We have found awesome employees in Iowa and we have that good support system… The Quad Cities is the perfect community for what we are doing because has been supportive.”

Now, TapOnIt is looking to hire to help expand their company with this new investment.

“We are very, very blessed to have this opportunity, especially in the Quad Cities,” Wilson said. “We are excited to be bringing these jobs to Iowa and to bring some recognition to our tech community in the state of Iowa, when there is not necessarily a lot.”

The history of TapOnIt

TapOnIt has been in the works since 2013 after coming up with the idea. With a background in digital advertising, Wilson decided to quit her job in 2014 to pursue TapOnIt.

Wilson said part of why she felt TapOnIt was needed was that she noticed how fragmented the advertising field is.

“You can’t guarantee if someone saw the TV commercial or hears a radio ad,” Wilson said.  “But at the end of the day, we all have our phones with us pretty much all the time… It just made sense (to start advertising through a phone). We decided that if we could put the images of great offers and promotions into the hands of people who wanted to receive them that it would be a win-win.”

Wilson and Castillo started raising money locally and officially launched in the Quad Cities in April of 2015. Since then, they’ve raised $3 million.

Today, they have expanded their reach to Des Moines, Cedar Rapids and Iowa City, with over 70,000 registered users.

Why partner with media companies

After two and half years, they decided to start looking at how to move their company nationwide.

“One of our big growth plans was that originally we wanted to take over the world, one market at a time. But unfortunately, that is pretty expensive,” Wilson said.

In order to start expanding, they felt that partnering with local media companies would be a good way move TapOnIt further while continuing to drive traffic to local businesses.

“Publications have an audience, they are looking for new revenue strings, and we have a way that they can do that,” Wilson said. “They also have a relationship with the businesses in the area.”

New Media Investment supports over 600 publications in 36 states. These publications will now have TapOnIt available to advertisers.  

This is what made New Media Investments an attractive partnership.

“An important piece of this was New Media group’s support and understanding that it is time to start thinking in a different direction because people’s media consumption habits are changing,” Wilson said. “The way that people see brands and interact with brands all of those things are changing. New Media definitely stood behind what we were doing.”

In these new markets, the sales team at these New Media publications will help TapOnIt find businesses to advertise with, while the TapOnIt team helps fulfill all the markets, by helping with the backend of the offers.

Within the next 45 days, TapOnIt will roll out in Ames through a partnership with Ames Tribune.

Jess Lynk is a reoccurring contributor to Clay & Milk.