To hear Punchh Co-Founder and CEO Shyam Rao tell it, the digital marketing company was launched because a restaurateur friend called him and his other co-founders “nerds.”
The friend tasked them with using their technological expertise to figure out a solution for one of the key problems all restaurants face: acquiring new guests.
“The aha moment was determining the most cost-effective way to drive guests is word of mouth and we needed to learn how to drive word of mouth,” Rao told Modern Restaurant Management (MRM) magazine, noting that the key is to strategically use data while keeping hospitality at the core.
Puncch, which now serves more than 100 restaurant chains around the world and 35 million consumers, just announced a new round of Series B venture funding to fuel further expansion.
The company accepted $20 million in funding led by Sapphire Ventures, who funds category-leading growth technology companies, with participation from Cervin Ventures, bringing their total funding to date to $31 million. The new funding will be used to expand the Punchh Marketing Cloud to new industries and roll out predictive marketing capabilities using AI and machine learning.
Punchh is also introducing Punchh Acquire, which converts anonymous customers into brand loyalists through a broad array of channels including Wifi, SMS, social platforms, Apple Pay, eClub and others. Previously available only as a private beta, is now available to all Punchh customers and is currently being rolled out by Del Taco, Noodles & Co., Pei Wei and Focus Brands, among others.
Punchh’s new AI and machine learning tools were designed to empower brick and mortar retailers with the same data-driven, omni-channel marketing strategies that have allowed digital merchants to continually gain market share. By enhancing the Punchh marketing platform with intelligent and predictive consumer profiles, marketers at every level can create impactful, custom campaigns and offers across national, local, sku or even weather-based strata.
“Companies like Amazon have digital, data-driven and tailored 1-1 marketing down to a science, while brick and mortar retailers are left data-blind and forced to spray and pray – they don’t learn from your past purchases, can’t recommend products they know you’ll buy, and they aren’t able to send the right offers to you at just the right time,” said Rao. “Consumers that choose to do their shopping online as opposed to going to the store aren’t lazy – online retailers are simply doing a better job at knowing their customers and keeping them loyal with delightful and customized shopping experiences.”
Rao noted that customers such as Pizza Hut and Coffee Bean and Tea Leaf now have the tools to identify customers, predict behaviors and execute custom campaigns on the fly that fundamentally increase lifetime customer value.
While the company has previously focused on the restaurant industry, Punchh now intends to broaden their focus beyond the realm of restaurants and into new vertical markets including Health & Beauty and Convenience Stores, with more to follow. As part of the push into new markets Punchh is also announcing the launch of Fantastic Sams hair care along with TruFusion, a wildly popular chain of Yoga, Pilates, Barre and Cycling health and fitness stores.
“Punchh is already a global leader in digital marketing solutions for restaurants, which alone would be a fantastic reason to invest in the company,” said Jai Das, managing director, Sapphire Ventures. “But the scope of their technology goes far beyond just restaurants and encompasses all brick-and-mortar stores with a POS. We are excited to bring our global network and expertise to help the Punchh team scale their platform to meet the massive, global opportunity of providing Amazon-like customer insights to brick-and-mortar retailers”