Loyalty Firm Punchh Raises $40M For Brick-and-Mortar Analytics

As eCommerce rises in popularity – currently accounting for about 11 percent of retail sales, which is an increase of about 14.8 percent from last year – retail is coming up with innovative ways to compete.

Physical sales at brick-and-mortar stores rose 1.9 percent this year, and Punchh, a company that started in loyalty cards, is aiming to help those companies see continued growth by providing the types of customer personalization services normally afforded to online customers, according to a report.

Punchh has raised $40 million in a funding round led by Adams Street Partners and Sapphire Ventures, with AllianceBernstein also participating. The company has raised about $73 million so far and is valued at more than $300 million, although the exact number hasn’t been disclosed.

Most of the company’s business involves the restaurant industry; it counts companies like Pizza Hut, Denny’s and Taco Bell as customers. Punchh provides loyalty cards and ways to line up those cards with purchase history, providing customers with a personalized experience that can provide discounts based on their purchase behaviors. The company also helps clients with promotional campaigns.

CEO and Founder Shyam Rao said the company has information on 125 million customers around the world in 80,000 locations. “We get access to 100 percent of all transactions at those locations, working out to three billion transactions per month,” he said. That data is then fed into Punchh’s AI models to help improve its analytics engine.

The company has been steadily expanding into retail stores; it just secured a deal with Casey’s General Stores, which has 2,100 locations in 16 states.

Punchh also has a method of analyzing data for cash customers. “When you buy something in cash, we may not know who you are, but we do know that you come in at, say, 8 a.m. and what you bought,” Rao noted. “We can still use that to predict lifetime value and to generate a coupon.”