Online retailer Flipkart is in the final stages of acquiring a 20% stake in loyalty points management startup EasyRewardz, according to two people familiar with the matter. This transaction, expected to close soon, may value EasyRewardz at Rs 150 crore, added one of the persons cited above.
As part of this investment, customers will be able to use Flipkart reward points in the offline world.
“Flipkart wants to leverage its (EasyRewardz) loyalty platform to build loyalty solutions through which points can be used across online and offline merchants,” said the second person cited above, requesting anonymity.
EasyRewardz is a business-to-business loyalty management platform that helps brands and banks manage loyalty points. The entire backend of customers wanting to earn, burn and redeem loyalty points is taken care of by EasyRewardz. It was founded in 2011 by Soumya Chatterjee, Angad Singh, Sapan Kadakia and Tejas Kadakia.
Confirming the development, a Flipkart spokesperson said, “Flipkart continues to make investments in the Indian ecosystem in order to deliver value to our customers. Our investment in EasyRewardz is part of our ongoing initiatives to give superior customer experience.”
The strategy behind this investment seems similar to when Amazon invested in digital gift card company Qwikcilver, which was eventually acquired by PineLabs.
To drive loyalty, many e-commerce firms (large and small) have either been rolling out fresh reward programmes or tweaking the existing ones. While Amazon has been dominating online reward space with its Prime offering, Flipkart had made several unsuccessful attempts to crack loyalty and reward points in the past.
After tweaks, the Walmart-controlled firm launched its loyalty program — Flipkart Plus — last year. After a year, it was revamped into another loyalty centric product – SuperCoins. This allows customers to earn ‘coins’ on all Flipkart and partner transactions. An investment in EasyRewardz could possibly help Flipkart have a more holistic approach towards loyalty.
Flipkart is likely to leverage EasyRewardz to drive use cases for SuperCoins.
“Since EasyRewardz works with several offline retailers and brands, integrating them with SuperCoins will turn it into a more lucrative programme,” added the people cited above.
The company last raised $2 million in November 2017 as part of its Series A round from a clutch of investors including TransContinental Venture Fund, Venture Catalysts and angel investors such as PayU MD Jitendra Gupta and co-founder of Soch Vinay Chatlani.
The Flipkart round is a primary investment with all the previous investors continuing to be part of the company.
EasyRewardz offers a gamut of products to brands including Poiink and ‘loyalty program as a service’ which helps brands understand their customers better. Some of its customers include Kotak Mahindra Bank, VLCC and Mamagato. The EasyRewardz website also has shopping offers for individual users.