NEW YORK – Punchh, an online loyalty card service founded in 2010, has recently accepted a $20 million Series B from Sapphire Ventures and Cervin Ventures to expand into more retail verticals and increase the use of artificial intelligence (AI) and machine learning in its cloud software, bringing their total funding to date to $31 million.
Punchh was co-founded by Indian American Shyam Rao who told TechCrunch that it was the right time for the company to rise again as it already serves more than 115 restaurant chains including The Coffee Bean & Tea Leaf, El Pollo Loco, Pizza Hut, Quiznos, and Smashburger.
The company‘s eventual goal is to give these brick-and-mortar stores the same level of data analytics as e-commerce giants like Amazon by allowing its restaurants to digitize their customer loyalty programs and complements using Punchh Acquire which promotes offers through email, SMS, social media, Apple Pay and eClub.
The company’s algorithms are set to pull data event calendars, weather, local demographics and the purchasing history to offer individual customers better promotions. For example, if cold weather is expected over a holiday weekend, it might send offers for a discounted hot soup and tea set to mothers between the ages of 30 to 55.
“Companies like Amazon have digital, data-driven, and tailored 1-1 marketing down to a science, while brick and mortar retailers are left data-blind and forced to spray and pray – they don’t learn from your past purchases, can’t recommend products they know you’ll buy, and they aren’t able to send the right offers to you at just the right time,” Rao said in a press release.
“Consumers that choose to do their shopping online as opposed to going to the store aren’t lazy – online retailers are simply doing a better job at knowing their customers and keeping them loyal with delightful and customized shopping experiences,” he continued.
“The tools to compete with Amazon do exist and, as Punchh customers like Pizza Hut and Coffee Bean and Tea Leaf can attest, brick and mortar retailers now have the tools to identify customers, predict behaviors and execute custom campaigns on the fly that fundamentally increase lifetime customer value,” he added.
Punchh has also announced its intention to expand their market beyond restaurants and offer their customers promotions when they are in convenience stores and gas stations as well as places that offer health and beauty products and services.
They are already announcing their launch at Fantastic Sams hair care and TruFusion, a wildly popular chain of Yoga, Pilates, Barre and Cycling health and fitness stores, according to the release.
“Punchh is already a global leader in digital marketing solutions for restaurants, which alone would be a fantastic reason to invest in the company. But the scope of their technology goes far beyond just restaurants and encompasses all brick-and-mortar stores with a POS,” Jai Das, the managing director of Sapphire Ventures, said in a press release.
“We are excited to bring our global network and expertise to help the Punchh team scale their platform to meet the massive, global opportunity of providing Amazon-like customer insights to brick-and-mortar retailers,” he added.
According to TechCrunch, Punchh currently has 145 employees with a market in the United States along with Australia, Canada, Costa Rica, India, Malaysia, New Zealand, Singapore, and the United Kingdom. The company is based in San Mateo, California with offices in both Austin, Texas and New Delhi, India.
Rao is currently the CEO of Punchh and serves as its Vice President of Products & Customer Success, according to Bloomberg.
He has previously held senior-level positions at Motorola, co-founded LoCognition, a mobile startup focused on aggregating and standardizing access to location based services across different cellular networks and was on the Principal Investments Team at Merrill Lynch.
Rao holds a Bachelor’s degree in computer engineering from the University of Toronto and an MBA from the University of Chicago.