Virtual Piggy Inc., an online payment system for consumers under 18, spent the last year getting deals with well-known online merchants that want to sell to teens and children.
Now, the Hermosa Beach company is making a big push to bring them more customers – and investors are taking notice.
Shares of Virtual Piggy, which trade on the Over-the-Counter Bulletin Board, rose 16 percent to $1.76 for the week ended April 3, when it hit its 52-week high. The company was one of the biggest gainers on the LABJ stock index. (See page 32.) The stock has more than doubled in value over the course of the last year.
Katherine Thompson, a technology analyst who covers the company for Edison Investment Research in London, said it’s the right time for Virtual Piggy to build a bigger customer base.
“Until they had merchants, there wasn’t much point of a huge marketing campaign,” she said. “But now they have a critical mass of merchants and they can start pushing on the marketing side.”
Virtual Piggy lets kids and teens shop online while allowing parents to decide how much they can spend and what sites they can visit. It deals with privacy concerns by keeping the customers’ identities hidden from sellers.
The company makes money from fees from its merchants, which include more than 100 youth-oriented companies such as K’NEX Brands LP, O’Neill and Claire’s Stores Inc.
The company last month announced a promotion with Fathead LLC in Detroit, which sells sports graphics, offering buyers 30 percent off products bought through Virtual Piggy. It also announced a promotion with Gaia Online, an Internet game company in San Jose.
The aim is to get more kids to shop online. Jo Webber, chief executive of Virtual Piggy, said her goal is to get to 1 million shoppers this year.
“We’re really focusing on consumer acquisition,” she said. “We’ve got stuff for them to buy and now we need people.”
The company generates little revenue because it has yet to sign up many customers. It reported revenue of $1,213 in the fiscal year ended Dec. 31.
The company is also trying to improve its mobile offerings. Last week, it hired former PayPal executive Iain Herd to lead its global mobile products business, a crucial area for Virtual Piggy as more children and teens use smartphones and tablets to shop online.
“A lot of children and teens who would use it would use it from mobile,” Thompson said. “The company wants to make sure they can take advantage of that marketplace.”