Digital loyalty card start-up Punchd has been acquired by Google for a reported $10 million, in the latest move by a major tech company looking to snap up the skills of innovative start-ups.
Based in the US, Punchd is a smart phone app that works as a digital punch card.
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Users download the app to their mobile and hit the “Nearby Venues” button, which generates a list of venues located near the user that accept Punchd.
When the user arrives at a venue they locate the QR code before opening the app and hitting the “Get Punched” button. The app reads the code automatically and punches the user’s digital card or alerts them of a reward that’s due.
The idea for Punchd was formed in 2010 by computer scientists Reed Morse and Grantland Chew, who designed the first prototype in an Android development class.
“We built a senior project and later a business around our idea. And while our team of entrepreneurs has stayed small our ideas have not,” the start-up says on its site.
Punchd was one of the first companies to participate in the 500 Startups program led by serial entrepreneur Dave McClure.
500 Startups provides early stage start-ups with funding ranging from $10,000 to $250,000 via seed investments, a start-up accelerator program and micro-fund models.
Punchd, which has just six staff, took to Twitter to confirm it had been acquired by Google before announcing it on its site.
“We’ll be joining Google’s Mountain View teams, just down the street from our offices at 500 Startups, to improve how businesses and customers interact,” it said.
While Google wouldn’t comment on the terms of the deal a spokesperson says the company is happy to welcome the Punchd team into the fold.
“They’ve built a cool and efficient way for customers to engage with local businesses and we think they’ll be a great fit for our mobile and local teams,” the spokesperson says.
Google’s statement suggests the acquisition is primarily a talent buyout, with the tech giant renowned for picking up innovative start-ups and integrating them into its operations.
Earlier this year it was revealed Google had embarked on an aggressive hiring surge as it looked to attract top talent from around the world.
“We’ll hire as many smart, creative people as we can,” a company spokesperson said.
It has been suggested that Punchd could complement the upcoming Google Wallet payment system, which could use the start-up’s technology to improve its loyalty provisions.
Google’s motives for acquiring Punchd remain unclear but talent buyouts are becoming increasingly popular in tech space, as evidenced by DealsDirect, which last month acquired online start-up ToyBarn.
DealsDirect chief Paul Greenberg says there is a lack of talent in the sector, hence the increasing number of talent grabs.
“I think these smaller e-commerce guys have had to do more with less and they have some really interesting solutions around CRM, site search and so on,” Greenberg told StartupSmart.
“I think there is a shortage of talent in this space and these guys are showing they are very nimble and have some great knowledge with them.”