“Engaging customers with rewards and special offers is smart business. Instead of spending a ton acquiring new users, small businesses can re-engage with customers through rewards and special offers. Fivestars does just that, which is why the company is announcing today that it has raised $50 million in a third round of funding.
Fivestars drove more than 35 million visits across 10,000 small businesses in 2015, with the simple promise of making consumers feel like VIPs.
“We saw this transformation [where] instead of [spending] marketing dollars on acquiring new people, it was more cost-effective to get existing customers to come back more often and treat them better,” said Victor Ho, CEO of Fivestars, in an interview with VentureBeat. “Starbucks can do this with its mobile app. But we saw small businesses get left behind.”
The third round of funding comes from lead investor HarbourVest Partners, as well as existing investors Lightspeed Venture Partners, Menlo Ventures, and DCM Ventures. The company is using part of the money to hire more sales and engineering staff.”
Read the entire article by Dean Takahashi on VentureBeat here: Fivestars raises $50 million to help small businesses build consumer loyalty