“Payment marketing” startup Swipely is announcing that it has raised $12 million in Series B funding.
Although founder and CEO Angus Davis (who founded TellMe, which was acquired by Microsoft) said that he’s focused on “looking forward to the future,” it’s worth noting that this is the first round that Swipely has raised since the company moved on from allowing users to share credit card purchases with friends to its current focus on payments, marketing, and loyalty. He did say that the company was able to sustain itself for three years on its $7.5 million Series A because it spent the money “judiciously,” and because it was already bringing in significant revenue.
Swipely’s helps merchants use their credit card payment data to gain a deeper understanding of customer behavior. Customers can also sign up for a loyalty program that’s tied to the card that they already use, and the merchants can then send them targeted messages and offers.
There have been a lot of new payment startups emerging in the past few years, Davis said, but they’re not competing with Swipely for the same customers — Square, for example, has also been adding features for merchants to manage loyalty programs, but Davis said Square businesses tend to be smaller than Swipely’s, who normally do at least $1 million a year in credit card sales.
“We’re the new kids on the block in a pretty enormous market, and frankly, the people that hurt when we win are the legacy, old school payment providers,” he said.
The round was led by Shasta Ventures, with participation from new investors First Round Capital, Greylock Partners, and Index Ventures. Davis said the funding should help Swipely “pretty dramatically ramp up the size of our team” and go “from serving hundreds of merchants today to thousands of merchants within the year.”
In addition to finding new customers, Davis said he wants to offer additional services to the existing ones. When I asked what he had in mind, he pointed to Swipely’s most recent upgrade, which added a reputation tracking feature and analytics for measuring the in-store success of online promotions.
Swipely says it currently manages $700 million in sales for its businesses, as well as relationships with nearly 2 million customers.