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Rewards apps get rewarded for winning customer loyalty

May 17, 2024
Animated illustration of a hand infinitely scrolling through screens on a phone that show dollar bill signs in different colors.

Illustration: Aïda Amer/Axios

Apps designed to help shoppers save money while building loyalty for brands are getting checks — lots of them.

Why it matters: Loyalty programs are seen as ways to hook budget-conscious consumers, especially as customer acquisition costs have grown.

State of play: Walmart-backed cash-back rewards company Ibotta made its public debut last month, raising $577.3 million and valuing the company at more than $3 billion.

  • Fetch, an app that lets consumers scan receipts to earn rewards, raised $50 million from the Morgan Stanley Private Credit fund last month.
  • Earlier this year, Bilt Rewards, a company that allows consumers to earn rewards from their rent and daily spending, raised $200 million from a round led by General Catalyst.

Zoom in: Smaller rounds signal investor appetite down the chain.

  • Web3 loyalty platform Superlogic raised $7.6 million from Amex Ventures, Sangha Capital, 10S! Capital and Nima Capital.
  • Monocle raised a $7.5 million seed led by F2 Venture Capital to speed up its tailored promotions offering.

Zoom out: Rewards programs can reduce churn and increase retention as well as help brands and retailers differentiate from rivals, according to Faster Capital, an online incubator and accelerator.

What they're saying: "No one's magically spending more money, but what they do is they'll actually shift their dollars towards the companies that come in and reward them for something back," Fetch CEO Wes Schroll says.

  • This allows brands and retailers to understand better what the long-term value of a customer is, as well as giving them a sales lift, he adds.
  • Fetch hit profitability in December, he says, which puts it in a good financial position to grow.
  • Fetch raised a $240 million Series E in 2022.

The bottom line: "Rewards are a better way to reach consumers efficiently and effectively, particularly as the industry faces an imminent cookieless future," Schroll says.

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