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More than a quarter of all US residents Use co-branded credit cards today to get discounts and other extras from the brands they use regularly, but all is not rosy in the world of loyalty commerce. Big brands like Uber, Starbucks, and Walmart have it all I withdrew of such projects over the years after failing to see the returns they expected. Now, taking advantage of embedded finance innovations, a startup has launched its name Without card She thinks she’s figured out how to make card layouts work better.
Today it announces $30 million in funding to expand this work. Previous backer Activant Capital is leading the round, with participation from Mis Chief (a fund co-founded by Plaid’s Zach Perret), Industry Ventures, Thayer Ventures, Assurant, and strategic backer Amex Ventures.
Cardless does not disclose its rating in this round – nor does it give an indication of whether it is flat, up or down from its previous rating. For some context on that, when it last raised money — $40 million in 2021 — the valuation was just over $350 million.
Meanwhile, the San Francisco startup was growing. The company, which offers Visa, Mastercard and American Express card options, said revenue – exact numbers were not disclosed – increased five-fold in the past 12 months, which was on par with its growth rate the previous year. The company’s target market is the US – and there are no plans to travel overseas at the moment – although it is working with global companies to reach end users, along with brands large and small based outside the US itself. Among the new clients are Qatar Airways and Alibaba, as the latter aims to provide services to small and medium-sized businesses in the United States that use Alibaba to purchase goods that they in turn use or resell.
Cardless’s unique selling point isn’t that it helps businesses build co-branded cards. There are dozens of companies, from newer tech companies like Marqeta to established companies like traditional banks, that already offer this.
Instead, Cardless’s pitch is that it does so on a more efficient platform, where the brands involved can create more personalized card experiences to sign up and qualify users within weeks between planning and execution, to build rewards, and in turn manage and monitor how they do so. performance of these products.
“The credit card space is everywhere from a consumer standpoint, but from a brands standpoint, it’s time for a change,” said Michael Spielvogel, president and co-founder of Cardless. The majority of co-branded credit cards in a $77 billion industry.
Features include the ability to set up card applications within existing applications, and then integrate card management into those applications.
Once created, rewards and other marketing can be integrated and modified through the dashboard. Fraud detection and security are built into the platform, as are usage analytics to help product managers understand what’s working and what’s not.
There are also additional features like lending, which also opens the door to Cardless and potentially also offers services like buy now, pay later. Likewise, it will be interesting to see what Cardless develops for future products, given the incoming US administration’s plans to impose new tariffs on goods coming from some countries. Since SMEs are one of the company’s areas of interest, could there be scope for tax calculations and other financial instruments in the future?
The bulk of its business today is “new,” Spelfogel said, meaning companies that have never offered cards before. He added that he expects that over time it will be more about convincing existing co-branded card companies to switch from their existing ones to Cardless. So the big question will be whether, in the long term, the market is interested in disrupting the status quo enough to make this shift.
Investors are betting on the availability of sufficient will.
“(Credit cards) are a really big market,” said Andrew Steele, who led Activant’s round. “Co-branded cards are not derivative of a derivative space, where you end up with a very small potential market to address… and the big guys can’t provide the kind of service that Cardless does.”
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