MadBid.com is an online penny auction site launched in the UK in August 2008, where users buy bundles of bids and place them on new products being auctioned. MadBid.com received £4million in Series A Funding from Atomico Ventures in July 2010.
MadBid.com is a pay-to-bid auction platform where users purchase “MadBids” otherwise known as credits in order to place bids on auctions. Bids are purchased online in bundles. Users can also bid via SMS however it is substantially more expensive. Auctions run on MadBid.com are commonly known as “bidding fee auctions” or “penny auctions”, a type of auction in which participants must pay a non-refundable fee to place a small incremental bid. The winning bidder pays the final bid price, which is usually significantly lower than the retail price of the item. Because most bidders will receive nothing in return for their paid bids, some observers have stated that the fee spent on the bid is actually equivalent to a wager.
Each auction has a timer which typically runs for between 15 seconds to 1.5 minutes. When an auction starts the timer will count down from its set time, when a user places a bid the timer will reset to its original time and start counting down, this process continues until no user places a bid within the specified time and then the auction will close. The highest bidder (which is the last bidder) will win the right to purchase the product for the auction close price. Users of MadBid.com can save up to 98% on RRP according to The Times.
MadBid.com also has a ‘Buy Now’ feature on some auctions, which means a user can buy the product at any time during the auction, and get a discount equal to the value of bids placed in that auction.