There are all sorts of loyalty program out there, but let’s be honest — most of them are a pain in the ass to navigate. They require you to carry around a punch card, or you have to check in using some kind of mobile app, or use a specific rewards card. And each local merchant is tied to a different app or loyalty program, which means that users need to have various different apps or cards at the ready to capture rewards.
New York City-based LocalBonus differentiates itself by offering up a “universal” loyalty program that doesn’t require users to download an app, checkin to a location, or carry around a punchcard to get points. Instead, it ties LocalBonus loyalty points to purchases made with a user’s debit or credit card. Once someone has registered a card with LocalBonus, then any transaction made at participating merchants will begin automatically accruing points. Those points can then be redeemed for cash at various increments.
To improve its product and expand into other markets, LocalBonus has closed a $900,000 round of seed financing. The funding round was led by Payment Ventures, with Actinic Ventures and other angels also participating. Payment Ventures’s Tony VanBrackle, a vet with 25 years of experience in the payments industry, has also joined the board.
LocalBonus currently operates in five different markets throughout the U.S., including New York City, Denver, Seattle, Portland, Sacramento. It works with other third-party loyalty programs, and has more than 800 merchants providing loyalty rewards through its service.
The startup was founded by CEO Derek Webster, who previously worked at Oliver Wyman advising banks and payment networks on their payments strategy. Prior to that, he ran credit card product development at E*TRADE. The startup graduated from the Entrepreneurs Roundtable Accelerator program in April, and has been head-down since then signing up new businesses and seeking to expand its network of local merchants.
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