Leaf Looks to Kill the Cash Register, Own “Entire Merchant Experience”

7/31/13Follow @gthuang

Point of sale is moving to the cloud.

In other words, the Internet revolution, which has disrupted massive industries such as advertising, retail, and entertainment, is finally coming to your corner store.

You’ve seen inklings of it already. From daily deals to mobile check-ins and payments, companies of all sizes have been vying for a piece of the brick-and-mortar retail pie. They’ve been struggling to get local merchants in shops and restaurants to adopt technologies that will help them with marketing, bookkeeping, customer relationships, and payment processing.

But the bottom line is, will it increase sales?

The jury is still out. What is clear is that a land grab is underway to own the next-generation point-of-sale systems that will be in millions of stores. Will it connect to your smartphone? Will it be a store-owned tablet or add-on device or app? Whatever it is, Google doesn’t own it. Amazon doesn’t own it. PayPal or eBay doesn’t own it. Not yet, anyway.

One of the early companies fighting for a piece of the action is Leaf. The Boston-area startup makes a tablet and software platform that handles payments, orders, and analytics for small and medium-sized businesses. The company got started in early 2011 and has grown to 30 people on a few million dollars in super-angel funding.

What’s interesting about Leaf is that it’s using new hardware and software to try to build an ecosystem of apps and services around the merchant’s point of sale. If it’s successful—a big if for a startup in this cutthroat sector—Leaf will be in position to own a nice chunk of the overall merchant experience.

But first it has to get effective distribution. And then things have to break its way as the sector shakes out over the next few years.

I recently caught up with Leaf’s co-founder and CEO, Aron Schwarzkopf (pictured at top), over e-mail to talk about his team’s strategy and long-term view. Here’s a lightly edited transcript of our exchange:

Xconomy: Could you give us an update on your growth, in terms of customers, employees, and so forth?

Aron Schwarzkopf: Leaf has hundreds of customers in 69 cities (23 states) across the U.S. We are currently processing $55 million on an annualized basis and expect to be at $500 million by the end of the year. We’re growing rapidly and now have 30 employees. As we continue to grow, we’ve made hiring the right people a priority, and are actively recruiting to help us scale our operations. It’s definitely an exciting time to be at Leaf, and we expect that to continue over the coming weeks and months.

X: The SMB (small and medium-sized business) market is challenging, especially in this crowded sector. How do you get distribution?

AS: Leaf has three main channels for distribution. The first is strategic partnerships with large merchant acquirers where we … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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