Toronto-based Drop, a mobile app that allows users to collect points on top of their usual loyalty programs, has launched in the US backed by a $5.5 million seed round.
The round was led by Sierra Ventures with participation from White Star Capital, ff Venture Capital, Portag3 Ventures, and HOF Capital.
“Drop is a unique concept that brings brand-agnostic rewards to millennials to give them a seamless experience they crave, while also giving brands an opportunity to hook new, loyal customers,” said Mark Fernandes, managing director of Sierra Ventures. “We’re excited to be an integral part of Drop’s international expansion and seeing them scale beyond the massive success they’ve seen in the Canadian market.”
Tunzey founder Derrick Fung launched Drop in July 2016 with $1 million in funding and a mission to build a millennial-focused loyalty program.
The platform allows users to link their credit or debit to the app, and every earn points for whenever they spend with Drop’s merchant partners, which include companies like foodora and Sephora. During beta testing, the company’s beta users collected over one million points and linked over three payment cards on average.
“We first launched in Canada and saw great growth and success (#2 in app store under Lifestyle). We then told ourselves that if the numbers in the US look as appealing from a cost, user engagement perspective, we would start focusing efforts down south,” said Fung. “We hit number three in the US app store and consumers are just as — if not more — engaged with our product.”
Fung also says the largest incumbent to date, Plenti, is showing signs of winding down and pulling out of the US market.
“To us, this shows that the US consumer is looking for a newer and more innovative product as the ‘traditional’ coalition model no longer is effective,” Fung says, adding that the company has added Bloomingdales, The Body Shop, and Casper as US partners.