LevelUp Leads “Cambrian Explosion” of Mobile Payments & Rewards
Don’t bet against Boston-based SCVNGR. That’s what I’ve been hearing lately. You take that much talent and that much money and throw them at a big market, like mobile payments or rewards programs or local deals—call it what you want—something’s going to stick.
That something seems to be LevelUp, the mobile app created by founder Seth Priebatsch and company that lets consumers make purchases with their smartphones and get rewards at some 3,000 restaurants and stores around the country.
LevelUp said yesterday that it has closed $9 million more in financing from T-Venture (Deutsche Telekom) and individual investors, bringing SCVNGR’s total raised to about $41 million from the likes of Google Ventures, Highland Capital Partners, and Balderton Capital. The startup says its valuation is $172 million.
LevelUp is trying to create a new kind of payment network that provides merchants with customer analytics, local marketing, and a rewards program—all in one system—with no interchange fees for moving money around. (There are other fees for acquiring new customers and retaining old ones.) But the network will need to grow far beyond its current 200,000-plus consumers for the company to rake in serious revenues. And that’s the plan.
The trick, of course, is that there are so many other companies and competing approaches in payments, loyalty, analytics, and deals. But LevelUp’s strategy seems to have solidified, and its path through these crowded sectors is perhaps more straightforward than ever.
I traded e-mails with Priebatsch this week about his company’s progress and how his role as, ahem, Chief Ninja has evolved recently (or not). Here’s a transcript:
Xconomy: Has anything changed in the mobile payments landscape in the past few months? What’s the big trend?
Seth Priebatsch: We’re in the pre-Cambrian explosion of mobile payments. Everyone and their mother is launching a mobile payments company. So the big trend is diversity and volume of players.
The interesting trend that I haven’t seen evolve yet is a de-focusing on the “payment” and more focus on “value beyond the transaction.” As you know, that’s 95 percent of what we think about in regards to … Next Page »