Chicago-based customer loyalty company Belly is the latest to receive a gold stamp endorsement from hot-right-now VC firm Andreessen Horowitz. The firm has invested $10 million in Belly’s Series B round and added partner Jeff Jordan, former chairman and CEO of OpenTable and former PayPal president, to the board.
Belly is a universal loyalty program that offers customized rewards systems for small and medium businesses, via either smartphone or a physical card. It claims to have accrued more than 200,000 active users since its August 2011 launch. Today it has also announced an expansion to New York City and Boston, adding to its pre-existing presences in Chicago, Austin, Milwaukee, Madison, Washington DC, and Phoenix.
The $10 million round, which comes solely from Andreessen Horowitz and is one of the firm’s few non-Silicon Valley investments, follows combined funding rounds worth $2.875 million from LightBank and Silicon Valley Bank, according to Belly CEO Logan LaHive.
LaHive tells me that LightBank’s Brad Keywell helped secure the deal by pitching Marc Andreessen (disclosure: he’s an investor in PandoDaily) and Jeff Jordan (also a PandoDaily investor) with an investor deck that the founders build in iBooks, complete with integrated video and slideshows.
“From the moment we first met Jeff Jordan, it felt much more like a partnership than it did a startup pitching a VC,” says LaHive.
Belly is operating in a competitive space, nudging up against wider-ranging competitors such as mobile payments services LevelUp and Square and daily discounts companies Groupon and Living Social. LaHive believes, however, that Belly’s singular focus will help it establish itself as a dominant player in the space. So far, the company has seen strong growth, taking 166 days to notch up its first 100,000 check-ins but accelerating since then. The company now registers 100,000 check-ins every eight days, LaHive says.
Part of Belly’s appeal lies in its approach to customer service, especially in helping small businesses set up and learn about the high-tech approach to loyalty programs. Belly strives to level the loyalty marketing playing field for small businesses by supplying them with technology, analytics, and training. It now has 1,400 iPads in stores across its participant cities. Users can use QR codes printed on physical cards or displayed on their smartphones to connect with the in-store iPads whenever they make purchases.
One of the quirkier customer incentives came from Belly’s first partner, Chicago’s AlleyCat Comics, which allowed especially loyal customers a considerable perk: Once they had spent enough money at the store, they could punch the owner in the gut. Other rewards are more mundane, such as free dance lessons or the old faithful “get your 10th coffee free.”
The company has a staff of just over 50 and plans to use the new funding to build more social features into its product as well as focus on HTML5 development. It expects to be in most major cities soon.