LoyalBlocks Lands $9 Million Led By General Catalyst To Scale Out Its Mobile-Based Loyalty Program

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LoyalBlocks, a startup that makes a mobile-focused technology platform for brick-and-mortar businesses looking to encourage customer loyalty, has raised $9 million in new funding.

The round, which serves as LoyalBlocks’ Series A, was led by General Catalyst Partners with participation from Founder Collective and existing investor Gemini Israel Ventures. This brings the total investment into LoyalBlocks to $12.2 million. As part of the funding, General Catalyst’s Adam Valkin, who joined General Catalyst from Accel Ventures late last year, will join LoyalBlocks’ board.

LoyalBlocks, which is headquartered in New York City and has its engineering operations in Israel, says it will use the new funds to further scale out its operations throughout the United States — at the moment, it’s got a solid foothold with over 1500 locations using the platform, CEO Ido Gaver tells me. The company has a full-time staff of 18 that could also grow with the new funds.

LoyalBlocks is essentially a platform that lets small brick-and-mortar businesses easily create their own customized app experience to give incentive for customers to spend more money and make return visits — it’s like a modern version of the old fashioned punch-cards and reward cards handed out by small businesses of yore (or, well, 10 years ago.) LoyalBlocks turns a business owner’s venue into an “automated zone” that lets companies interact with customers as soon as it detects that they walk through the door, by sending them offers and promotions automatically.

Of course, there are many other players that have emerged in this space over the past several years, taking hold in certain regions and eyeing expansion to take the larger market. LoyalBlocks is in part differentiated by the fact that there’s an intellectual property play here, too. LoyalBlocks says it has the “only patented technology that enables automated hand-free punch cards and customer rewards.” It will be interesting to see which ones end up dominating as the next-generation customer loyalty space evolves.