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Dash Hudson Raises $1 Million to Beat the Instagram Shopping Conundrum

The startup is also building an influencer network.
Dash Hudson's iPhone app. Photo: Dash Hudson

Dash Hudson's iPhone app. Photo: Dash Hudson

Dash Hudson, the app that aims to make your Instagram photos shoppable, has announced a seed round of $1 million, tapping a mix of institutional and individual investors, including early-stage venture capital firm Innovacorp as well as GoInstant founders Jevon MacDonald and Gavin Uhma. (The company, co-founded by Thomas Rankin and Tomek Niewiarowski, previously raised $400,000 in an angel round.) 

Dash Hudson, which launched in October, works within the parameters of Instagram's copyright policy to "feature" images from the popular photo app. Each image includes links to the products shown, or at least similar products. Just like Instagram, you can follow your favorite influencers. Unlike Instagram, you can also shop their looks right in the app.  

Now, Dash Hudson is taking that one step further by recruiting influencers to post certain products. Take Madison Iseman, an up-and-coming actress with more than 145,000 followers on Instagram. She is paid a flat fee — comparable to what she might make for another sort of social media post — to post an item on Dash Hudson, and to promote the post on Instagram. Anyone who hearts the Instagram post (and also happens to be a Dash Hudson subscriber) will get an alert at the top of her phone. If she clicks on it, she will be directed to an entirely shoppable page on the DH app. It's almost as good as linking to a typical e-commerce URL. The catch, of course, is that you have to be a Dash Hudson member to get that alert. Influencers encourage their followers to sign up through Instagram and other social media networks.

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For the consumer who wants to shop her favorite blogger and web stars' posts, the prompt is the great news. For Dash Hudson, the prompt has opened up a new avenue of business. Instead of allowing influencers to use affiliate links, the company instead works with brands to pay influencers that flat fee for sponsored placements. (DH takes a commission fee.) This liaison idea, outside of everything else Dash Hudson does, could be a good revenue stream down the road. Given that Instagram just announced live links in advertisements, being able to add links to normal Instagram posts may not be that far down the road.

But for now, Rankin and Niewiarowski are going to use this additional funding to continue to build their influencer network, as well as their relationships with brands. The more product they sell now, the better off they'll be if and when links do go live with Instagram.