Norwalk-based Webloyalty.com Inc., winner of the Deloitte Connecticut Technology Fast 50 award, is launching new services and expanding across new markets while battling a class action lawsuit for alleged coupon fraud.

By Sujata Srinivasan

Richard Fernandes, the Harvard and Princeton educated CEO of Norwalk-based Webloyalty.com Inc., should be downing a glass of champagne or two. His is the only company in the 10-year history of the annual Deloitte Connecticut Technology Fast 50 awards to have made it to the number one spot two years in a row. A provider of online affinity services that supplies 1.8 million subscribers with reward and discount programs, Webloyalty’s growth trajectory between 2001 and 2005 is simply astounding: the company posted a 15,151 percent growth in revenue at $109 million during the period.

In contrast, the top 10 companies on Deloitte’s list posted an average growth of 867 percent between 2001 and 2005, while the average growth for all Technology Fast 50 companies was 51 percent. According to Alex Discepolo, a director with Deloitte Tax LLP in Hartford, Webloyalty was selected not only on the basis of revenue, but for its ability to post sustained growth. Technology Fast 50 entrants must have achieved operating revenues of at least $50,000 in 2001 and $5 million in 2005, and must own proprietary technology or proprietary intellectual property. “Sustained growth in revenue is a significant accomplishment,” says Discepolo. “The key here is if you’re a start-up company and you have a significant increase in revenue, and if the percentage growth over a much larger period of time is still being maintained—that’s what makes a company keep coming back [as a winner.]”

But the champagne in the glass is not quite as bubbly. In fact, it has every possibility of getting as flat as champagne can get. In September of this year, Lerach Coughlin, a law firm based in San Diego, filed a class action lawsuit in a U.S. District Court in Massachusetts on behalf of the victims of an alleged “coupon click fraud” scheme on the Internet.

In an interview with Connecticut Business Magazine, over a lunch of salmon and salad at Carbone’s in Hartford, Fernandes for the first time discussed in detail the implications of the lawsuit and his outlook for the company.

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