While the pace of mobile order ahead can feel runaway-train-fast from the perspective of having watched it virtually explode in the last 18 months, rapid progress is very much in the eye of the beholder in this case.
“I think some people could look at the space and say this took forever, even though it has been moving quickly. The truth is, we always want things to go faster all the time,” Michael Hagan, co-founder and chief strategy officer of LevelUp, told Karen Webster in a recent conversation.
And today, LevelUp has gotten a big boost to move that progress along even further as it has announced the completion of a $50 million round to grow its business.
Investors who participated in this round include long-time partner and investor JPMorgan Chase — which made its first investment in LevelUp in 2015 — U.S. Boston Capital and CentroCredit Bank.
These days, LevelUp is used by nearly a million people every month, and it has come a long way from its founding days when “interchange zero” was its motto and Co-Founder and Chief Ninja Seth Priebatsch literally lived in his office.
The goal now, Hagan told Webster, is to take the money and accelerate the growth of its next-generation mobile payment and loyalty network.
“There are really three primary places where we will use this investment. The first is really building out the capacity of the LevelUp app itself to give the consumer the ability to order ahead and pay at our merchant partners. Which leads to the second area — building up those partner relationships … to help them build [a] custom mobile storefront where they can engage their users with loyalty and rewards. And finally, we are looking to grow out the developer network with APIs and other services to allow others to tap into LevelUp’s platform.”
A Different Take on the Developer Relationship
It’s the latter where Hagan believes LevelUp can really achieve scale, building tools so that partners like.
Chase can take advantage of them.
The developer network, as LevelUp has conceived it, gives the firm a means by which to open up access to the mobile order ahead functions, in-store mobile payments functions or loyalty and reward functions that they have built — as well as offer means for partners and merchants to “seamlessly fold that into their own custom offerings.”
“There are a lot of folks who fit the bill to take advantage of that,” Hagan said. “We are more [interested in] people gaining access to the services we provide from LevelUp as a platform and care somewhat less about them knowing LevelUp as a brand.”
That isn’t to say that LevelUp doesn’t love the “purists,” whose exposure to the firm is mainly through the app itself — and who use it as often as they eat lunch. But the reality is that as LevelUp contemplates its growth and expansion, it will increasingly have customers who never know its name, because its platform is in the background powering another merchant or payment provider’s app.
“It doesn’t matter what app the customer [uses] to take advantage of our platform — at the end of the day, if they are skipping the line and getting rewards seamlessly, that is what matters more than the brand.”
Building Better, Building Bigger
Apart from its attempts to take on scale, Hagan noted that the new round of funding will also help better refine and perfect its rewards offering.
“Rewards are critical to gain any kind of adoption. I think you can look at Apple Pay and what has flailed in the market, because consumers always want to know — ‘What is in it for me?’ We caught on to that early when we were developing the tools when we started with the progress bar. Now we have developed and are building more sophisticated and personalized programs that range from the very simple to the extremely complicated behind the scenes.”
Hagan said that the investment partnership with CentroCredit Bank will help with very nascent moves toward international expansion.
“They are helping us with … our foray into international expansion. This is preliminary at the moment, but they are very well-placed to that — when the time comes to position [ourselves] globally, we can be ready to move ahead.”