BagThat rings up £2 million

New online store BagThat has netted £2 million in funding two weeks after the business launched.

Model Jodie Kidd has signed up as brand ambassador for BagThat

Model Jodie Kidd has signed up as brand ambassador for BagThat

Milton Keynes-based BagThat has started what it expects to be a series of new funding rounds by teaming up with investment manager Oxford Capital.

BagThat, which is backed by high street retailers such as Samsung, Halfords and Brent Hoberman's mydeco.com, works by using social networking. Instead of being given a firm price, users can choose what they are willing to pay, bidding for it and then sharing the transaction. The more users that get involved in the bidding the lower the product price ultimately becomes.

The launch was linked to research from the company which found that 24 per cent of British consumers do more than half of their shopping online. The statistics also showed that, on average, UK shoppers do 32 per cent of their shopping online - increasing to 45 per cent when asked how much they believe they will do in future.

Oxford Capital partners has led the £2 million investment round, which is a first close, to aid BagThat with the development and marketing of its online shop. Additional investment from other institutional backers is planned, according to a statement.

David Mott, investment director at Oxford Capital, says that BagThat's offering 'stands out from the crowd'.

He adds, 'It has an innovative approach to online shopping, combining the best of auction buying and group purchasing power.

'Leading model and TV personality Jodie Kidd has signed up as brand ambassador which adds celebrity stardust to the launch.'

Andy Sutton, founder and chief executive of BagThat, says that Oxford Capital, which picked up the Investor of the Year gong at this years' New Energy Awards hosted by sister title Business XL, has done a 'terrific job' in helping the business build connections with new investors.

He says, 'They are great advocates for UK growth businesses and their management input and expertise in helping business to grow has been hugely valuable as we have worked together to develop and launch BagThat.

'BagThat started because we believe that social shopping is the future. We all take advantage of volume purchases - whether it's 3 for 2 offers of bulk buying - but rarely do we, as individual  consumers, benefit form volume purchases on quality, branded goods.'

BagThat gives 5 per cent of its net profits to charity, which in 2012 includes Malaria No More, The ForceSelect Foundation and The Phoenix Foundation.