Punchh Raises $20M To Give Brick-And-Mortar Retailers Better Data Analytics

Punchh, which began as an online loyalty service in 2010, has expanded its marketing service platform to include more than 115 restaurant chains, including Pizza Hut and Quiznos. It has secured $20 million Series B to expand into further retail verticals and grow its cloud software’s use of artificial intelligence and machine learning.

Cervin Ventures, a returning investor, participated in the funding, which was led by Sapphire Ventures. Punchh’s total funding has been brought up to about $31 million when you include Series A and angel investing. The startup says it wants to deliver a data analytics package like e-commerce giants such as Amazon have to brick-and-mortar stores.

Punchh lets restaurants make their customer loyalty programs digital and supplements that service with tools such as Punchh Acquire, which is intended to develop repeat customers by promoting offers via channels including emails, SMS, social media, Apple Pay and eClub.

“Imagine trying to manage that process of using mountains of data to build customer relationships and tailor every experience, at scale across hundreds of locations. That’s what Punchh does,” Rao said.

Shyam Rao, co-founder and chief executive, said the time was right for Punchh to fundraise again given that it now serves many of the biggest restaurant chains, with 34,000 locations in total.

Punchh is turning its attention to convenience stores, health and beauty brands, and gas stations, with clients including Fantastic Sams hair salons and TruFusion so far. It is in competition with similar platforms such as Stamp Me, LoyalZoo, and Stocard.

Rao said Punchh has highly specified targeting campaigns that differentiate it from rivals. The algorithm Punchh uses pulls data from multiple sources such as weather, event calendars, and local demographics. It also uses what it calls “micro-moment marketing” which is based on the buying history of individual consumers.

For example, it can send out offers for discounted hot soup and tea to mothers between the ages of 30 and 55 in conjunction with coming cold weather. Punchh says it boosts spending at its customer’s restaurants by 10% to 20%.

Jai Das, managing director of Sapphire Ventures said in a statement that “Punchh is already a global leader in digital marketing solutions for restaurants, which alone would be a fantastic reason to invest in the company, but the scope of their technology goes far beyond just restaurants and encompasses all brick-and-mortar stores with a POS.”