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Merkle Acquires Loyalty Startup 500friends

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Yet Another Reminder To Mind Your Words

Customer relationship management company Merkle announced today that it has acquired startup 500friends.

The startup’s LoyaltyPlus platform allows businesses to run customer loyalty programs in stores, online, and on mobile. It also allows them to identify the customers that are likely to have the highest lifetime value.

500friends co-founder and CEO Justin Yoshimura told me he was gearing up for the company’s next funding round and talking to potential investors, including Merkle (which was already 500friends’ largest channel partner). The CRM company had a different idea: What about acquiring the startup outright?

Yoshimura said the idea appealed to him because his goal is to turn 500friends into “the loyalty partner for retailers.” The acquisition will allow him to focus on growing the product and customer base, plus he said said there’s a big “product synergy” in tying loyalty programs into CRM.

The financial terms of the deal were not disclosed, but Yoshimura said the entire 500friends team (which has more than 30 people) will be joining Merkle, and he’ll be taking the title of vice president of loyalty.

500friends raised a total of $12 million from investors including Intel Capital, Fung Capital, Crosslink Capital, and Y Combinator.