Punchey, Payments & Loyalty Rewards Startup Launches and Raises $1.7M in Funding
August 18, 2012
Punchey is launching their small business payments and loyalty rewards program out of beta and have announced their $1.7M Series A round of funding from Stevens Ventures.
I first learned about Punchey (at the time named Honey Direct) back in February from a trusted contact, who joined the startup in Boston that was founded by Nathaniel Stevens, one of the Co-Founders of Yodle.
Since Yodle.com is based in NYC… anytime I hear of a serial entrepreneur, who chooses Boston as the place to build their next startup, my ears definitely perk up. Come to find out, the real decision was whether or not to base the company in the Bay Area or Boston. Nathaniel chose Boston because it was a better fit for his product and his network is much stronger here.
He was part of the founding team at Yodle that raised $35M in funding and built a very successful and still thriving company focused on helping local business owners compete by using their online marketing platform.
Nathaniel decided to take his domain experience with small, local businesses and help them with a new offering… a Payments & Loyalty Rewards platform, where it is easy to accept payments by swiping a credit card through a device that is either connected to your mobile device or PC / Mac. They also offer a virtual terminal solution where you can accept payments through an online Punchey account.
Ultimately, Punchey goes well beyond being a payments solution. They are aiming to give local merchants the same advantage that a company like Starbucks has with their customer intelligence and loyalty rewards program. As part of Punchey, there are tools that allow you to easily measure your sales and build custom rewards programs to incentivize customers.
Punchey's pricing structure is flexible and ranges from 1% - 3%. They assess every merchant and come up with the lowest rate possible, versus just keeping it at one flat rate, which is what many emerging payment companies have been doing. Their goal is to keep pricing as fair as possible for merchants and get paid for the additional value that they create for every local business.
The bigger question for Punchey is obviously the competitive landscape of companies playing in the same space with either payments or rewards solutions like Square, LevelUp, Intuit, and Swipely. To compete against the other players within the industry, they are heavily focused on their customers (local merchants) as opposed to building out a consumer brand. Plus, it's all about the overall platform of combining payments with their marketing & loyalty rewards platform.
Punchey currently employs ten people in their Boston offices. The funding for Punchey comes from Nathaniel's own investment firm, Stevens Ventures, which also holds investments in other companies such as Twice, Lovely, and FamilyLeaf.
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