SCVNGR raises $12M to expand LevelUp mobile payment app
SCVNGR, the startup behind the fast-growing LevelUp mobile payment application, has raised $12 million in new funding from existing investors Highland Capital Partners, Google (NASDAQ:GOOG) Ventures and Balderton Capital as well as new investors Continental Investors and Transmedia Capital. SCVNGR has now raised $32 million to date.
SCVNGR launched in 2008 and initially focused on location-based social gaming experiences optimized for the iOS and Android platforms, rewarding players for completing missions and checking in at merchant destinations. The company introduced LevelUp in mid-2011: The app enables users to link their credit or debit card to their smartphone, generating a unique QR code they can scan at the point of sale to complete transactions. LevelUp business partners also can integrate incentives and loyalty programs into the app.
LevelUp is now available at more than 3,000 merchant locations in eight U.S cities, including casual dining chains Johnny Rockets and Ben & Jerry's. Close to 200,000 users are spending at a volume of $2 million per month with the app. SCVNGR founder and CEO Seth Priebatsch told VentureBeat that about 65 percent of LevelUp users are active every month--50 percent are active every two weeks, and the average customer uses the app two to three times a week. The total number of LevelUp transactions processed is growing by 15 percent every seven days; the average transaction is just under $10.
SCVNGR does not charge any payment processing fee on LevelUp transactions. The firm instead generates revenue by claiming a share of sales derived from partners' daily deals campaigns and related mobile promotions. Priebatsch admitted that LevelUp is not yet a profitable business.
SCVNGR will leverage the latest funding to roll out LevelUp nationwide. The company also will increase its staff to accommodate the product's rapid growth, and it has already added 40 new sales team members in the last few months.
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