Mountain View, California — Late last week, reports from authentic sources were swirling that Google had snapped up smartphone-based loyalty card developer “Punchd” — but the company’s Twitter account flatly denied that it had been bought. Now, just three days later, the company officially announced that the six-person startup has indeed been gobbled up by Google and will be working from the search giant’s Mountain View headquarters going forward.
Google confirmed acquisition Monday of Mountain View, Calif.-based startup Punchd, a maker of loyalty cards for keeping customers coming back to patronize local businesses, which demonstrates that the search giant may not be completely abandoning QR technology just yet.
Punchd, whose team of entrepreneurs created a smartphone-based loyalty card business, is widely believed that Google will utilize the service as part of its Google Wallet mobile payment system.
The company describes itself as “the replacement for your buy-10-get-1-free cards at your favorite shops,” and according to TechCrunch, it is reported to have been acquired by Google for an amount believed to be more than $10 million.
According to the Punchd page announcing the acquisition, Punchd was conceived in 2010 as a “better solution for loyalty cards,” to sort out the problem of connecting customers to their favorite shops, restaurants, and venues.
Punchd Co-Founders Reed Morse and Grantland Chew “formulated the first ‘buy 10, get 1 free’ prototype in an Android application development class” using Android phones at Cal Poly San Luis Obispo because Google donated Android phones to Cal Poly’s computer science department.
“We built a senior project, and subsequently a business, around our idea. And while our team of entrepreneurs has stayed small, our ideas have not. We are excited to announce that Punchd has been acquired by Google,” noted the Punch team in a note on its Website July 11.
The cause of the contradiction: Punchd co-founder Morse stated that at the time of our post, the deal had not been finalized throughly, and that now it has. Okay.
The way Punchd functions is pretty simple: Whenever a customer buys something from a participating store that is part of a customer loyalty program such as: (buy five cups of coffee, get one free) the participating store in this case lets the customer scan a QR code they keep behind the counter.
Hence, the Punchd app keeps track of how many times the QR code has been scanned, and informs the user when they are eligible to receive their loyalty reward. However, Google put its weight behind near-field communications (NFC) technology with the launch of Google Wallet, the Punchd buy may serve as validation that the two technologies do not have to be rivals.
Nevertheless, Morse did contributed some other fascinating tidbits, including the fact that the Punchd team is not simply being absorbed by Google to work on other projects — it is going to continue working on Punchd full time, and that the service isn’t going anywhere.
Besides, the Punchd technology, or something approximating it, appears destined to be used to reinforce the one-two punch of the Google Wallet mobile-payment service.
The company is still very young but the move it has made makes greate sense. The six-member Punchd team will begin work at Google’s Mountain View, Calif., offices, but a spokesperson declined to say at this time, adding: “They have built a cool and efficient way for customers to engage with local businesses, and we think they will be a great fit for our mobile and local teams.”
Surprisingly, Google, which has around $36 billion in its coffers, made some 48 purchases in 2010 and has acquired more than a dozen so far this year. This is Google’s 14th acquisition of 2011.
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