Square And Griffin Debut An Integrated Merchant Case And Holder For iPhones And Readers, Will Create More Accessories For Sellers
Last year, Square debuted Stand, a piece of hardware that turns a merchant’s iPad into a card-swiping register. The idea was to provide a simple and elegant way to allow merchants to accept Square for credit card processing and swiping via their iPad. In news announced today at CES, Square is extending this ease of use to iPhone users of its card readers, via a new partnership with hardware developer Griffin Technology.
Until now, Square hasn’t debuted any accessories for its card case reader. Third-party developers have created key chains and cases for the readers, but these haven’t been part of the Square ecosystem. Square and Griffin are announcing a new Merchant case for iPhone 5s and iPhone 5, which is a protective case optimized for a Square Reader and a companion iPhone. The Merchant case, which also includes a Square Reader, is available to order for $19.99 here (current orders shipping within 2 weeks).
Square is also announcing a new initiative called Works with Square, which allows developers to build accessories for Square businesses. The inaugural partnership is the one being announced today with Griffin, and Square says it actually partnered with the hardware accessories developer to design the Merchant case to enhance both performance and convenience for merchants selling on the go with Square.
The case itself is custom-molded to secure the Square Reader when connected. A groove in the bottom of the case aligns with the Square Reader to guide a credit card to a frictionless, consistent swipe. The case is made from silicone, and aims to protect the phone from bumps and drops. Additionally, the merchant case features non-slip sides and corners so it’s easier to hold the phone and to hand over for customers’ signatures. And when merchants are not using the Square Reader, the hardware can be detached and stored in the back of the case. Aesthetics wise, the case is no beauty, but it seems to be solid and functional.
It’s unclear what percentage of Square’s merchants use the iPad vs. iPhone for readers, but it’s probably safe to assume that many merchants who are on the go (i.e a massage therapist, tutor, taxi driver) would use their iPhone over an iPad. The case provides a pretty easy way to use your iPhone for personal and professional use when accepting payments. Square decided to develop this case for iPhones, and has not yet developed any sort of external accessory or stand for the Android (although its reader does work with Android).
In terms of the Works With Square program, Square is expanding its ambitions beyond just providing point-of-sale hardware into providing accessories that are optimized for the Square experience. This could mean that the company starts partnering with the developers of receipt printers, kitchen printers, cash drawers and barcode scanners to create a more connected experience for merchants. We asked Square whether there is a revenue-share agreement with developers in this program, and did not receive an answer. But the company did say that products in the Works with Square program can use the Works with Square badge on their packaging, and in certain cases, can include Square readers as part of their packaging.
As Square prepares to potentially go public, it’s clear the company is creating an ecosystem of sellers and developers around its payments products and hardware. Square just debuted an API for the first time in December and also launched a marketplace for its merchants to be able to sell online as well as in-store. Works With Square could be another channel through which Square’s brand and readers are promoted.
It’s no secret that many deals have been struck and key relationships formed at TechCrunch founder Michael Arrington’s former house in Atherton. In case you aren’t familiar, Arrington threw epic parties at his home for the tech community in the early days of TechCrunch. Police were called, booze was flowing, people passed out. I don’t have enough fingers to count how many times I’ve spoken to a Silicon Valley entrepreneur or VC who said he or she used to frequent Mike’s house parties back in the day. Clearly this was the place to be for anyone looking to meet their next investor, acquirer, co-founder etc.
And that’s exactly what Box co-founders Dylan Smith and Aaron Levie were thinking when they showed up to Mike’s house in early February 2006 for the Naked Conversations TechCrunch Party. It was in Mike’s backyard where they met then Draper Fisher Jurvetson partner Emily Melton. Beers in hand (actually only Levie was of age-barely, so Smith was drinking water), the pair pitched Melton on their idea. She was so impressed and their passion for what they were building cloud storage, that she immediately introduced them to the DFJ partner covering SaaS and enterprise investments, Josh Stein, who months later led Box’s first round of institutional investment.
Smith and Levie credit this meeting as one of the key turning points for Box to become what it is now—a close to billion dollar enterprise cloud storage company with 11 million users, 80 percent of the Fortune 500 as customers, and $162 million in funding. In the company’s latest funding round in the Fall of 2011, the company was valued somewhere above $600 million, a number that could easily have jumped in the past 9 months. While two teenagers starting a tech company out of a garage isn’t that unique in the Silicon Valley world, Smith and Levie’s ability to create a valuable product from thousands of dollars, and instilling confidence in well-known VCs and companies is.
From Research Paper To Funding
The idea for Box originated from a research project that Levie, who was then a college student at USC, was working on in 2004. Levie’s project examined storage options and in the process of researching his paper he discovered how fragmented the market was. He called up 10 random businesses and asked how they are storing content and data and received ten different answers. Back then, Levie realized in his research that even though there were no iPhones, tablets or Android phones, people still wanted to access data from different places. These places just happened to be extinct technologies now, he adds, joking that the Palm Trio was back then a prime destination to find documents.
“The opportunity I saw was to build something that would change how you want to get your information,” he explains. At the time, many thought Gmail would be sufficient for storing data. But Levie felt there was a real business behind where to store data and this was in the cloud. The name Box came from his vision of storing data in a virtual box in the cloud.
During the Winter Break of 2004, Levie shared his idea with his high school friends from Mercer Island in Seattle, Smith, Jeff Queisser and Sam Ghodes. Both Smith and Levie had toyed around with startups in the past and had dreams of starting their own companies. The boys shared Levie’s passion for the cloud storage idea and by the Spring of 2005, Levie, Smith and his friends were actually developing a product. Box, at the time, was simply an online file storage service where users could pay to store files in the cloud.
This was all happening in between classes, says Smith, who was enrolled at Duke, and in order to fund the early days of Box in 2005, Smith invested $20,000 of money he earned playing online poker. The team actually launched the product in February of 2005 as a simple file storage product for both consumers and enterprises. Levie and Smith sent their pitches to the media and landed coverage on sites like Gizmodo, where they offered free storage incentives for new customers. The fledgling startup quickly accumulated a few customers and began its journey as a real service.
In the summer of 2005, Levie, Smith and the team housed themselves in Smith’s parents’ attic in Seattle and worked on accumulating more customers and developing the product. Smith’s younger brother did tech support, Levie said, and he and Smith tried to raise additional financing in Seattle. But this proved to be challenging at the time. “Seattle was lacking the Silicon Valley-Zuckerberg story. VCs and angels in Seattle were still repairing wounds from the Dot.com bust.”
Smith and Levie decided to take their roadshow national and began contacting angel investors outside of Seattle. One of those investors was Mark Cuban. Levie cold-called Cuban via email about Box, and got a response from the entrepreneur immediately. In the Fall of 2005, Cuban decided to put in $350,000, which was the company’s first outside investment.
Around the same time, Box was scaling fast and it got to the point where Levie and Smith realized that they could no longer attend school and manage the day-to-day activities of Box. Both Levie and Smith approached their parents about dropping out of college in December of 2005. While both Levie and Smith’s parents were supportive, Smith says he his mom was a little bit concerned about throwing the education away. It took some convincing, says Smith, but in the end he promised he would go back and earn the degree at some point.
Once the decision was made to leave their respective colleges, Aaron (then 21) and Smith (then 20) mutually agreed that Silicon Valley was the best place to be. The pair packed their bags and moved to Berkeley, California in early 2006, where Smith’s uncle rented them a small garage. As Smith recalled, both Levie and him worked and lived night and day out of the garage.
As for the product, Levie and Smith began to brainstorm ways in which to get the service to go viral, and decided to open up the file storage service for free. Smith says this was a key turning point for the company, which began soliciting customers with little sales efforts. In fact, Box was getting so much traffic that servers were breaking down. But in terms of the vision, Box was still a consumer and business company. As Levie explains users “interpreted what they were doing with Box in their own individual way. Some people thought it was backup, others found it a way to replace emails,” he says.
Then came that fateful Spring day at Arrington’s house, where Levie and Smith pitched Melton on their company. The boys had already decided they needed to raise a round, and were attempting to make connections with investors on Sand Hill Road, but the in with Stein at DFJ was able to speed up the process.
Stein recalls in one of his first meetings at Smith and Levie’s Berkeley garage, he had to step over enormous mound of stinky laundry, and was legitimately worried about the boys’ health in garage. But besides the pungent odor, he was immediately struck by how impressive the product was for a bootstrapped startup. “You could tell right away that this was a company that was very product-focused. Coming off the heels of storage failures of Xdrive, Aaron had come up with differentiated and distinctive vision for what product should do, what it should look like.” And what also impressed him was Dylan’s detailed insight into the startup’s business operations despite his youth.
At the first meeting, Stein peppered both Smith and Levie with questions about the company, business model and more. By 2 a.m. the next morning, Stein received a multi-page response from the team with thoughtful, detailed responses to each questions. He saw this as a good sign. “There was an intelligence, an energy and drive in Aaron and Dylan that was immediately apparent. That’s not always the case int he valley,” he says.
And when evaluating whether to invest in the company, he thought that the product served a definite purpose in the business world, but had what he called “modest aspirations,” for Box. DFJ signed off on the investment and by July 2006, terms sheets were signed and Box had raised $1.5 million from the firm.
Consumer To Enterprise
Interestingly, it was Stein who helped define a set vision for the company in its early days. Box, at its start, was focused on both consumers and businesses, offering a dead simple way to store files. In 2006, the company continued to iterate on both sides of the business, launching file sharing options for consumers and businesses. But Stein, who was an active part of Box’s business (and served on the board), saw the writing on the wall that enterprise customers were “stickier,” in his words, and pushed the company to “sharpen its focus.”
Even Levie admits that he didn’t grasp how large and substantial the enterprise opportunity was until Stein started pitching him and Smith on a more targeted product. He explains, “Josh Stein started to connect the dots on doing an SaaS enterprise model. We credit him to being able to shine light for us on something we couldn’t see.”
The company began tailoring the product towards business users around 2007, and as Stein says, “engagement went through the roof.”
Another added feature which helped boost enterprise use was security, which was added in 2008. The company found that businesses were willing to pay even more for added security and permissioning. While not the sexiest product feature, the ability to have administrative control over data was really a turning point for product, says Stein. The addition of admin controls and security played into the needs of big companies, and CIOs started to actually pay attention to Box.
It was these offerings that caught the attention of Justin Slaten, Director, Information Technology for Wasserman Media in 2007. “There were lot of companies popping up at time that were consumer facing products in file storage but weren’t focused on the enterprise,” he says. “Box was the first company that was willing to offer a product that focused on business users.”
Nearly six years later, Wasserman is still using Box (along with Procter And Gamble, Pandora, Skype, LinkedIn, Turner and many others). Slaten says that Box is “in tune” with what clients want in a user experience, whether that be collaboration, apps or security. “They are always deploying features that I actually want,” he says.
By 2008, the company still had just a handful of employees but Levie and Smith were both settling into their defined roles within the business, with Levie as CEO and Smith as CFO. As Stein explains, the founders’ strengths were complimentary from the beginning. “Aaron is focused more on the product, design and technology part of the business and Dylan is drawn to the economics and business model. These defined skill sets allowed them to focus on building business and think about it holistically.”
Not only did Smith and Levie work days and nights together, but they were also room mates and actually lived at the offices until 2008. The company eventually moved to Palo Alto shortly after the DFJ funding round, and the Smith and Levie took a loft above the office, which had just a few mattresses on the floor.
Living and working together usually doesn’t work for most founders, especially when they are actually sharing a bedroom. But Smith explains that they developed systems early on to be able to live with each other, calling Levie more of a brother than a friend.
From A Berkeley Garage To A $600 Million-Plus Dollar Business
As competitors started popping up in 2007 and 2008, Box focused on strengthening its enterprise product even further. Box steadily evolved into more than just a file storage platform, becoming a full-fledged collaborative application where businesses can actually communicate about document updates, sync files remotely, and even add features from Salesforce, Google Apps, NetSuite, Yammer and others. Mobile is another area where Box has been focusing, adopting HTML5, launching iPhone, iPad and Android apps and more.
Along the way, Box realized the market was much bigger than file storage. As it evolved into a collaboration platform, the company realized the enormous opportunity in providing a simple, cloud-based alternative to legacy systems like Microsoft Sharepoint. The company began aggressively campaigning for existing Sharepoint users to make the switch.
Stein says that in 2009, he realized that Box was going to be a multibillion company. “You could see acceleration of taking off. In 2010, the company doubled the amount of sales reps selling the product to businesses and sales and productivity skyrocketed.”
Around the same time, Box raised $15 million on Series C funding from Scale Venture Partners, DFJ and U.S. Venture Partners. A year later, Box landed $48 million in new funding from Meritech Capital Partners, Andreessen Horowitz, Emergence Capital Partners, DFJ, Scale Venture Partners and US Venture Partners.
While Levie tends to shy away from commenting on the acquisition, we heard from sources that it was a hard decision to say no to. There was a lot of money to be made, and it was a risk to keep pushing forward as an independent company.
“I think you get these opportunities once every decade where such a massive change is happening in the landscape that enables a startup to be at the center,” says Levie. “And there is a lot of pressure to make sure you build something successful when making the decisions to stay independent.”
When making the decision to turn down the acquisition, Levie and Smith both had the sense that Box’s story wasn’t finished. The company was still growing rapidly, churn rates were down, and customers were actually renewing for additional paid plans, all leading to a healthy, fast-growing top line.
Turning down the acquisition was a very clarifying experience for both investors and Box’s founders because it set a clear goal for the company. The expectation was at the time was that if Box stayed independent, the company was going to really go for it, with the goal of eventually becoming a public company.
At that point, it made sense for Box to raise another round, with this one totaling $81 million. Investors included Salesforce.com, SAP Ventures, Bessemer Venture Partners, NEA, Andreessen Horowitz and DFJ.
As for going public, Levie says that inevitably employees and investors will desire liquidity and being a public company afford this opportunity.
Stein echoes Levie’s thoughts, and believes the company is in a prime position to be a public company. “Enterprise SaaS companies are perfectly suited to be public companies. The company’s gross margins are north of 70 percent and there’s recurring revenue, which is great for the public markets,” he explains. “I think Box is the kind of company we see once every decade at DFJ. I compare it to Salesforce but I think Box is actually creating an even larger category of enterprise software. I think it has the potential to be the next email; basically what company intranets are supposed to be.” he says.
As for revenue, Box is on track to triple revenue in 2012. Last year, Box reportedly brought in around $25 million in revenue, so we’re looking at a $75 million-plus sales number for 2012. Smith adds that the company is growing faster than they ever have in the past.
The Enterprise Culture And The Competition
Running an enterprise company presents its own unique challenges. Levie says one of his biggest challenges is developing easy to use products for businesses, and iterating fast, despite being an enterprise company. “Our engineers have to be consumer internet minds, our products have to be consumer minded, we have to move fast but build software like an enterprise company,” he says.
Levie explains that each week, Box re-releases the site with fixes. He compares this to the yearly cycle for products builds for on-premise companies. But he sees the rapid product iteration of consumer focused companies like Facebook, as the future of enterprise and cloud.
“IBM, Oracle and Microsoft are always going to respond more slowly to market. They haven’t developed a rapid release product development strategy. So how we compete is moving more quickly, and being more agile. We can reach and get end users faster than the bigger player. The next generation of enterprise software companies will be organizations built like consumer internet companies that happen to sell to businesses,” Levie comments.
But the challenge to producing fast, and adding features is taking business customers off guard as well as education. For us to flip a feature through quickly, it has to be additive, Levie says. “We can’t impair the customer’s processes and this is a constant tension.”
Competition has also come recently from Google with the launch of the search giant’s own storage product, Google Drive. Levie doesn’t seem to be too worried to call Google a competitor. “I can’t think of a single startup that won’t have Google as a competitor. For same reason Oracle could never build a great consumer product, I think it is hard for companies like Google to be a leader in the enterprise.”
Another challenge, though unsurprising, is hiring, particularly in engineering and sales. As Box’s COO Dan Levin explains, the company needs to find people who are not only good at their job but also reinforce the entrepreneurial, product-driven, fast-paced culture at Box. He says that Box roughly phone screens 100 people to find ten to interview on site to make 1 to 2 offers.
And Box is continuing to staff up. Levie says the company is looking to boost headcount by 50-75 percent by the end of the year. Currently, Box has 425 employees and just moved to new headquarters in Palo Alto.
Levie recalls pitching Marc Andreessen a few years ago on investing in the company’s Series D round. He had put up growth projections and goals for Box, and while Andreessen said this data was positive, he asked Levie a thought-provoking question. “How fast does the storage market have to grow to get to these goals?” It’s a question that Levie continually repeats to himself when making projections for the future of Box.
Levie sees Box’s future particularly centralized around creating an ecosystem of apps both on mobile and web platforms. Last fall, Box launched a platform for developers building off of the Box platform, called the Box Innovation Network (/bin). And earlier this year, we learned about Box OneCloud, a mobile cloud and API for the enterprise that allows businesses to access, edit, and share content from their mobile devices.
Box is also looking to use data to help businesses make better business decisions. And adding new applications to the Box platform helps bring more data into the collaboration flow. “We want Box to be the foundation for storage, permissions, collaboration, security, with horizontal apps built on top of the service. We think we can be an important broker for applications to generate business and demand,” says Levie.
Smith adds that Box also plans to build data centers in additional countries in the world, and sees international markets as a huge growth area for the company.
A few years shy of their thirtieth birthdays, Smith and Levie are at the helm of one of the fastest growing enterprise startups in the technology world. And the company is fast approaching a billion valuation, if it hasn’t reached that already. Box’s story isn’t an overnight success but more of a testament to the strength of having two, passion-driven founders who weren’t afraid to cold-call well-known investors, drop out of college to live the startup dream, and squander thousands in poker winnings on a fledgling idea.
Samsung Electronics has acquired mobile entertainment startup mSpot, according to a release issued today. Financial terms were not disclosed, but previous reports point to an acquisition price of $8.8 million.
mSpot let users stream and watch full-length movies on their mobile phones and on the web. The company had struck deals with Sony, Disney, Paramount, NBC/Universal, Lionsgate, Warner, Image Entertainment, and Screen Media Ventures to stream full-length movie rentals to users’ PCs and cell phones, allowing you to switch between both devices as you pick up and leave off throughout a movie.
mSPot also offered a cloud-based music service, which let you upload your music to the cloud, and stream this content from a multitude of devices, ranging from PCs, Macs, to the iPhone, iPad and Android. Last year the company launched a Pandora-like radio-service for personal music collections.
It was tough for mSpot to compete with the likes of Apple, Amazon and others in the music, movie and film streaming world so the exit is probably best for the startup. mSpot raised $2.3 million in funding from Trinity Ventures.
Samsung says mSpot’s technology will be used to provide an “entertainment experience of music, video and radio services for users of Samsung devices, while extending mSpot’s cloud and streaming solutions to a broader base of global entertainment fans…mSpot’s entertainment services will be a key integrated offering on newly announced Samsung mobile devices.”
The acquisition includes technology, assets and human resources under mSpot.
Chicago-based Base, a company that develops a cross-platform CRM product, has raised $6.8 million in Series B funding led by Index Ventures with Social+Capital Partnership, OCA Ventures and the I2A fund participating. The startup previously raised $1.1 million in funding.
Founded in 2009 by Uzi Shmilovici, Base is a CRM product that is catered towards small businesses. Base wants to let businesses manage their customers and sales everywhere they are, and offers applications for the Android phone, the iPhone, Mac and Windows. The company also plans to release tablet and Windows Phone 7.5 apps soon.
You can capture, track and visualize your sales leads; manage contacts with notes, tasks and reminders and more.
Shmilovici explains that most CRM products are web-based and don’t offer mobility for users. As mobility becomes increasingly popular in the enterprise, Base wants to be the go-to CRM option for companies that need sales operations to be managed on the go.
“The cloud was only act one of the enterprise software revolution. The end game is to have your data with you on any device, at any time, anywhere you are. This kind of ubiquity, together with a focus on product design and user experience, is what makes the next generation of CRM”, said Shmilovici.
Since the beginning of the year, the company grew its user base by more than 500% and is currently being used by tens of thousands of businesses worldwide.
Mobile payments processing platform Square has been used by a variety of individuals and businesses, from charities to taxis to food trucks to political campaigns. Next up—art fairs and farmers’ markets.
The company says that at Etsy’s New York’s Spring Handmade Cavalcade last weekend in Brooklyn, over 90% of the vendors used Square to accept payments. And this weekend, Square says that many vendors at Unique LA, the largest independent fashion market in the country, will use Square to process card payments. Unique LA expects over one and a half million dollars to be spent in its market over the weekend.
It’s not surprising that Square is being used by independent purveyors at fairs and markets. The company’s smartphone dongle and companion payments app makes taking credit cards easy. The payments app has been a favorite amongst independent workers, merchants and small businesses for the past few years.
As reported a few weeks ago, Square is now processing $5 billion in annual payments (or around $416 million in payments per month), which is up from $4 billion in annual payments in March. And payment volume is up 25 percent over the past month. The company also just started making funds available in merchants’ bank accounts the next business morning (for any sales made before 5 pm), while other merchant processors can take 2 to 5 business days to get merchants their money.
Customer Loyalty And Rewards Platform For Local Businesses Belly Raises $10M From Andreessen Horowitz
Chicago-based Belly, a startup that is a fast-growing contender in the local business customer loyalty and rewards space, has raised $10 million in Series B funding from Andreessen Horowitz. The company also announced that Andreessen Horowitz partner Jeff Jordan, former chairman and CEO of OpenTable and former president of PayPal, will join the Board. This latest round of funding adds to a seven-figure round raised by the startup from Lightbank, the venture firm founded by Groupon co-founders Eric Lefkofsky and Brad Keywell.
Belly wants to reinvent customer loyalty rewards through gamification, digital check-ins and a iPad setup for businesses. But the startup has a slightly different take on how to achieve this. Belly offers a quick-setup, plug-and-play rewards platform to merchants. Part of this is an in-store iPad (which Belly supplies) that is used to validate paying customers right at the point of sale, and serves as a check-in point. Belly will also train employees to encourage them to participate in the program.
Merchants pay a monthly subscription for unlimited Belly cards to hand out to customers, in-store marketing materials and secure access to customer data that reveals sales, points and redemption data, as well as insights into foot traffic and card usage patterns. Businesses can even use Belly data to send out push-notifications about exclusive promotions and other rewards to Belly customers.
On the consumer side, to check in, customers can scan their smartphone at an in-store iPad POS and with each check-in, you get closer to a specific milestone, and reward (as stipulated by the business). You simply scan a Belly card (provided by the merchant), or use Belly’s iPhone or Android Apps on the businesses’ Belly iPad app (which sits next to the register). Once you check-in you accumulate points, and can start earning rewards.
On the Belly mobile apps themselves, you can simply open the app and see a list of merchants that are Belly users by your location. The app completely replaces the merchant card at all of these businesses. With the Belly card, you have one universal rewards card (that is attached to your email) which can be used at all participating Belly merchants.
The premise, says co-founder and CEO Logan LaHive, is that consumers don’t want to carry several different cards, and businesses need a loyalty system that everyone can use. “We’re eliminating overstuffed wallets,” says LaHive.
Jordan has high hopes for Belly, “We are optimistic that the startup has huge potential to revolutionize loyalty for businesses,” he says. “Now customer loyalty programs can be digitized with the web, data analytics, and smartphone. This used to be an inefficient system but Belly makes this is highly efficient and gives merchants great information on who their best customers are.”
He also adds that the talented team, elegant product execution with the iPad, and the backing from Lightbank all made the investment attractive for Andreessen Horowitz. In particular, Jordan feels that the loyalty market is fragmented and Belly is in a prime position to scale its business.
Of course, as CEO of OpenTable, Jordan has insight on how to scale a business catering to small restaurants and merchants. He says that Belly will need to build a sales team, fast. “The key is to get in as many cities as fast as you can,” he says.
Even in the past 9 months, Belly has been scaling fairly fast. Launched in August 2011, Belly has over 200,000 active users who have checked in over 800,000 times. Belly currently partners with 1,400 merchants and adds 100-plus new businesses each week. And starting today, Belly is available in New York and Boston, in addition to its existing roster of businesses in Chicago, Austin, Milwaukee, Madison, Wis., Washington D.C. and Phoenix.
One of the differentiating factors for Belly from its many competitors, says LaHive, (which include LevelUp, Perka, PerkVille, and PunchTab) is that businesses are able to tailor their rewards program.
Currently rewards at businesses range from a comic book store that offers customers a chance to punch the owner in the stomach, to a bakery that rewards customer 10 minutes of all you can eat cupcakes. You can arm wrestle a sandwich restaurant owner or ride along in a food truck that will let its best customers “egg” the truck as it drives by. Dog-A-Holic will post a “Portrait Of You And Your Dog On Our Wall and Red 7 Salon allows customers to “Shave Our Heads With A 1-On-1 Owner Buzz Cut.” Belly works closely with each individual business to ensure the rewards are unique and personalized to that business’ brand and culture.
Another added bonus for businesses is that they can see when each customer is checking-in, how often and more. Businesses can get a clear view of their most loyal and valuable customers. another data area where Belly may expand into is transaction data. Currently the app doesn’t track what the customer actually bought but is looking to integrate with Point of Sale systems in the future.
“We’re moving beyond the buy ten get one free program to work closely with each merchant to try to uniquely appeal to their customers,” says LaHive. “Businesses want to create personal relationships, and take what is offline and put it online, and analytics on how to manage customer behavior, communications tools, email and social media allows these business to have an ongoing relationship with customers.
The new funding will be used to build and staff a larger sales team to expand to other markets. While many of these sales people will be based in Chicago, others will be located in the local markets as well.
LaHive is also focused on product development and will be looking to transition all the startup’s apps from HTML5. The company will also being making a number of speed, and UI improvements as well as redesigning the experience.
As for location, LaHive plans to stay in Chicago. “For an earlier stage startup in Chicago, raising funding from a firm like Andreessen Horowitz is validating,” he says. “We feel that we are best scaled to roll out a quality loyalty program for businesses.”
Exclusive: RichRelevance, a company that powers personalized shopping experience for online retailers, has raised $20 million in funding led by Crosslink Capital with Greylock Partners, Draper Fisher Jurvetson and Tugboat Ventures participating. This brings the startup’s total funding to $50 million.
RichRelevance aims to take consumer shopping data and help retailers leverage this information into a more personalized experience. As e-commerce heats up, and big data strategies enter the market, more retailers want to provide customized online shopping for consumers to drive sales.
The company was co-founded by Sundeep Ahuja Tyler Kohn, Michael DeCoursey and Dave Selinger, who helped architect Amazon.com’s recommendation technology. Selinger tells us that in his additional experience at Overstock.com as Vice President of Software Development and Data Mining, he saw how challenging it was for retailers to use data to give consumers a better experience. And at Amazon, where Selinger helped lead the research and development arm of Amazon’s Data Mining and Personalization team, he was able to see the potential value in delivering a personalized UI.
“It’s hard for retailers to get an arm around different data sets and I wanted to help retailers leverage data to make the shopping experience better,” he explains.
RichRelevance offers three distinct ways retailers can add personalization. The first allows retailers to deliver product recommendations via email, or even as users are navigating through the site. RichRelevance takes all forms of consumers, data, including what items you may have licked on, purchase history, shopping cart history, search, and more to help personalize the shopping experience. RichRelevance serves more than 350 million personalized recommendations each day across its merchant networks.
For example, a retailer using RichRelevance could send an email to a consumer with suggestions of what they may like based their interactions with the site, or previous purchases. As Selinger explains, “The goal is to recreate the personal, consumer experience you have with a sales representative in te digital channel.”
The second product RichRelevance offers is focused on personalized advertising. The company will present relevant advertisements to consumers while shopping on retail sites. So brands such as Colgate can deliver an advertisement to a consumer in the midst of making a decision about what’s the right toothpaste. Selinger says the value proposition is similar to ad network. Launched in December 2010, RichRelevance’s advertising offerings are used by 3M, P&G, AT&T, Verizon, Toyota and Cisco. The company claims that these ad products can deliver a 60-100% sales lift for the advertised brand’s products.
Personalized offers are the final product the company integrates, and serves consumers targeted promotions.
In aggregate, RichRelevance’s clients represent more than 30% of online retail and today the company serves six of the top 10 US retailers in ecommerce, as well as seven of the top 50 leading UK/EU online retailers. Customers include Target, Walmart, Sears, Overstock, The Disney Store and others.
The new funding will be used to further develop RichRelevance’s product footprint, expand markets internationally and for research and development, says Selinger.
David Silverman, Partner at Crosslink Capital, tell us that the company has been able to see success because it is a technically savvy business that has taken advantage of a pop in e-commerce. “The innovation level of what RichRelevance is doing is exponentially better than competitors,” he says. “The company has the best technology algorithmically.”
“Data is the currency in today’s omni-channel retail environment,” said David Strohm, partner at Greylock Partners. “Companies like Apple, Google and Facebook have set the stage for what it means to use data to attract and maintain loyal customers. RichRelevance is among this select group of platform companies who can harness data on consumer behavior and insights, specifically shopping and intent data, to change the way that retailers and brand advertisers operate.”
As the e-commerce world becomes even more competitive, retailers are going to have to use their data to help deliver a more valuable experience. And the way to do this is through personalization. Clearly, RichRelevance is in a potentially lucrative position to be one of the go-to technologies to enable this for retailers, who may not be technologically savvy to manage and parse this data into an actual product.
Design-friendly online invitations and stationery startup Paperless Post has raised $6 million in funding from RRE Ventures, SV Angel, Tim Draper and others. This brings the startup’s total funding to $12 million. Previous investors include Ram Shiram and Mousse Partners.
The startup is sort of like the anti-Evite, aiming to allow consumers to create sleek, design-focused, personalized invitations that deliver the same quality as paper stationery. Users can send out invitations for any occasion and monitor as guests receive and reply to their invitations. The New York company was launched in 2009 by brother and sister team James and Alexa Hirschfeld.
The startup offers specialized invitations for specific types of parties (i.e. birthdays, weddings, bridal showers), as well as greetings for occasions (sympathy, birthday, congratulations).
Not all invitations and greeting cards on the site are free; Paperless Post recently rolled out premium designs as well (the platform previously was paid-only). The free product is more simple, explains James, with invitations delivered directly in the email without the trademark envelope opening. Paid invitations include more design value and other features.
James tellus is that he and Alexa started the company because they felt that there was a gap in the online invitation market for a more design-centric, personalized invitation experience. “There needed to be a platform that allowed self-expressions through design without advertising,” he says.
As for the future, the company, which has sent 60 million invitations over the past three years, will be providing more social toolsto enhance engagement between friends connecting over Paperless Post. Alexa explains, “We’re thinking a lot about receiver and what we can build for them.” This includes calendar integrations and more. The company is seeing 100 percent year over year growth.
And she says that the new funding will also be used to move the platform entirely to HTML5. Currently, 30 percent of Paperless Posts’s traffic is mobile.
Paperless Post faces competition from Punchbowl, Evite and others.
Startup Personal, which aims to give consumers control over their digital data, is debuting an iPhone app today, adding to the company’s existing web and Android apps.
Personal is a free web and mobile service that helps you take control of all the digital information about yourself and your life, decide who gets access to it, and use it for your benefit. This information ranges from your passwords, your kids allergies, emergency contacts, credit card info, and more. Basically, any information you may not want to store in email but want to be able to share with your loved ones or friends.
With Personal you can store various information in ‘data vaults’ where you can selectively share certain vaults with people. Of course, all accounts on Personal include a legal guarantee that you own your data in the system. At the very heart of Personal, are what the startup calls ‘gems.’ Gems are nuggets of reusable information that represent the details of your life – your family, pets, car, home, office, food and travel preferences, and more. You can decide which gems to add to your vault and which to share with others using our grant and request features. And you can download existing data from LinkedIn and Facebook. Personal also has a Gem Gallery, which is where you browse for the gems you need to use.
Using the iPhone app, Personal users can access all of their ‘Gems,” including logins and passwords, grant temporary access to their Wi-Fi info to guests at home or the office so they can quickly log on, give users access to loyalty programs and more.
The bonus of having this information stored in a mobile app is that you can access all of this on the go and share this information from anywhere.