When Texas-based supermarket chain H-E-B launched a rewards credit card in April, it didn’t go to a big bank or financial giant like American ExpressAXP +2.5% or J.P. Morgan Chase. Instead, it turned to a three-year-old startup called Imprint, led by Irish founder Daragh Murphy, which partners with consumer brands to launch co-branded credit cards.
Today, the roughly 8 million customers served weekly across H-E-B’s 340 locations have the option to pay for their groceries through Imprint, receiving 5% cash back and other rewards. H-E-B enjoys increased loyalty and spend, with hundreds of thousands of signed-up customers spending hundreds more since launch, Murphy said. And Imprint wins, too, earning annual card fees and taking its cut on the net interest income and fees to cover card processing costs.
Imprint’s pitch is that by adopting a tech-first approach to rewards, they can offer more granular and individualized rewards than typical rewards cards that are offered by traditional banks. H-E-B cardholders, for example, get 5% cashback for the H-E-B branded products — on which H-E-B has the highest margin — versus only 1.5% cashback for brand name products. Around Thanksgiving, cardholders could receive a text or push alert of a special deal on turkeys just for them. The potential, Murphy said, is that these personalized rewards will help increase how much money H-E-B’s customers spend at the grocery store.
These kinds of cards can be incredibly lucrative for businesses: The popular Delta Airlines American Express card alone accounted for nearly 1% of American GDP in spend, the airline’s CEO said in June. But for every company like Delta, which has figured out how to cash in on rewards, there are more brands like H-E-B that hadn’t gotten in on the action, according to Imprint’s CEO.
“What we’re selling the brand is loyalty,” Murphy said. “If you put a card in a person’s wallet, they will come back to your brand more.”
Now, New York-based Imprint has secured $75 million in a Series B funding round, raising its valuation to $240 million from $160 million reached at its series A in late 2021. Fintech specialist Ribbit Capital led the round, with participation from Thrive Capital, Kleiner Perkins and angel investor Lachy Groom, who previously headed up card issuing for Stripe.
A rare (if modest) up-round in fintech, which has seen valuations plummet alongside rising interest rates, the funding will help Imprint expand to bigger corporate customers and build towards a goal of managing more customer rewards. So far, Murphy says Imprint has signed a global “top-ten airline” but declined to specify which.
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