CEO Angus Davis Ramps Up Swipely, Takes On Payment & Marketing Industries
Hello, Rhode Island. For the smallest state in the Union, you have a disproportionate share of interesting companies and entrepreneurs. One of them is Swipely, led by founder and CEO Angus Davis.
The Providence, RI-based startup is releasing new software today that helps local restaurants and stores understand and manage customer relationships, as well as track sales performance and trends in real-time. Swipely also has a new partnership with American Express that it says helps merchants accept AmEx in a simpler way and get paid more quickly (in one day, instead of several or more).
“We replace the traditional credit-card processing companies. When Swipely wins, those industry stalwarts, they lose,” Davis says. “We’re eating their lunch.”
And it’s an awfully big lunch, at least in theory. There are more than 1,000 electronic-payment processing companies raking in about $70 billion a year in the U.S., says Davis (pictured below). The opportunity, as he explains, lies in processing those payments more efficiently while also providing useful services to merchants.
Swipely’s story has the usual twists and turns as the startup worked to find its target market. The company started in 2009 as a social shopping service, but then moved into payments, customer loyalty programs, and marketing analytics for businesses. Its service is based on information from credit-card purchases. In the past six months, Davis says, Swipely has “taken the ability to accept payments, and transformed that into analytics.”
The company’s new software and its visual interface (which runs on tablets and other devices) allows businesses to do things like profile customers based on their spending behavior—ranking them in terms of how much they spend, how often they visit the store, and so forth. The technology also gives managers a heat-map hourly view of how their business is doing. Davis compares the system to “Google Analytics for neighborhood restaurants.”
As Davis admits, this all sounds a bit like the Holy Grail of local marketing: understanding customers better to drive sales. And it’s a crowded and ultra-competitive field—companies and services like Square, LevelUp, Cartera Commerce, Linkable Networks, and Privy come to mind as being related. Davis argues that Swipely stands out from the pack because its product uses existing infrastructure (credit-card payments) instead of requiring a new way to pay; and because it’s going after neighborhood stores in the $1-million-a-year-in-sales range, rather than micro-merchants or big brands.
What’s more, the startup’s business is picking up. Swipely says it now has hundreds of merchant customers that are doing a quarter-billion dollars in annual sales through its system.
But what about the big challenges in the sector? I asked about consumer privacy. “We take it very seriously,” Davis says. “We’re trying to help restaurants and local businesses with information they already have. And we’re not revealing anything [like e-mail addresses] without the consumers’ consent.”
And on the “signing up merchants” side, it must be hard to get their attention, given all the noise around marketing analytics, loyalty, and payments?
“When we first started talking with merchants, they were inundated with daily deals and wanted to understand what we’re doing and what differentiates us,” Davis says. “One thing is, we don’t cost anything. Technically, [our typical] merchants are already paying close to $2,500 a month to accept credit cards. It doesn’t cost anything to upgrade to Swipely. They pay us essentially what they were paying the old-fashioned payment processing companies,” he says. “The other thing that helps us cut through the noise is, we don’t require changes in their behavior. We just lean into what’s already there.”
Still, the startup faces its own marketing challenge of getting more businesses to know about Swipely (and try it out). Davis seems up to the task. The well-known entrepreneur and angel investor started his tech career at Netscape in the late 1990s and then co-founded voice-applications firm Tellme Networks, which was acquired by Microsoft for around $800 million in 2007.
Swipely has raised about $8.5 million in venture and angel funding to date. The company has more than 30 employees, but hasn’t raised money since 2010 (a $7.5 million Series A round). Davis adds that he’s planning to ramp up sales and marketing and expand Swipely to “upwards of 60 people” in the coming year.
So is there a big new financing round in Swipely’s future? Davis basically said yes, without giving away the details. “I’d be kidding if I told you I was going to double or triple the size of the company without having the capital,” he says.