Lootsie, a start-up designed to allow developers to add reward programs to their games and other apps, has announced taking in an additional $3.5 million in funding. Co-founder and President Brandon Werber told TechCrunch that the announced take represents funding that the company took in over time though batches of a few hundred thousand dollars and that the latest announcement marks the end of seeking seed funding and the time to move on to Series A.
Lootsie is not exactly alone in this space. Kiip is a competitor, and in fact Lootsie’s COO Steven Cho was hired away from Kiip. Kiip preselects user rewards, whereas Lootsie allows users to build up points towards the reward of their choice.
Lootsie is also highly focused on creating consumer loyalty. Cho said the app works to divides users into different segments and rewards accordingly. A casual user gets Lootsie points and rewards, but the more valuable, more loyal users get big-ticket items to keep them loyal and entice them to continue using the app. For example, one superuser was rewarded with a fancy bicycle.
The funding in this early seed round came care of Tim Kendall (head of product management at Pinterest and former director of monetization for Facebook), Michael Liou (founding partner at Anvil Capital), angel investor (as well as manager for the musician Nas) Anthony Saleh and Brad Schwartz (founding partner at SLP Ventures).