What’s In The Cards For Cardlytics? A $70M Series F Round

CardlyticsFundingThere’s a time to invest in tech and there’s a time to invest in marketing – for Cardlytics, it’s time to do the latter. 

The card-linked ad tech company, which enables advertisers to send targeted offers to consumers directly embedded into their online banking experience, announced Wednesday that it’s raised $70 million in Series F funding led by Discovery Capital.

Although some of the money will be invested in product development, a large chunk of the new cash, which brings Cardlytics’ total to a bit more than $170 million, will go towards spreading awareness about its existing product line, said president and COO Lynne Laube.

“We’re one of the biggest companies that nobody’s ever heard of,” Laube said. “People don’t believe how much data we have access to. We’re going to use this money on marketing. We can deliver our services at scale – we just need to create the awareness.”

When Cardlytics partners with a bank, it provides a piece of software that sits on the bank’s own server behind a firewall. Transaction data is fed back to the bank on a nightly basis. A separate piece of software managed centrally by Cardlytics allows advertisers to create segments by interacting with the bank’s software.

For example, an advertiser could ask: How many consumers are there in the system who have spent more than $100 in my store over the last three months? The Cardlytics software would then communicate with the bank’s software to come up with a number. From there, the advertiser could issue a command, such as: Track those high value consumers identified by the software for 30 days to see how their spending shifts.

In that way, a consumer’s personally identifiable information never leaves the safety of the bank’s environment and individual information doesn’t have the chance to leak out.

“We never know who the customer is,” Laube said. “We know that it’s the same person over time, but we never know their name. The only entity that knows that is the bank. And all the advertiser ever knows is that a certain segment of people does this or does that.”

Cardlytics serves anywhere between 1.5 billion and 2 billion impressions monthly within the private bank channel, depending on the particular month and seasonality. According to Laude, Cardlytics-driven offers garner a roughly 8% click-through rate, versus the pitiful industry average – .01%, according to DoubleClick.

Cardlytics claims the technology can scale. The company maintains partnerships with just shy of 400 banks, including Bank of America and PNC Bank, and integrates directly with more than 83 million checking accounts, representing roughly 70% of the US population.

That gives Cardlytics a front row seat to a consumer’s shopping behavior through actual purchases and transactions. Beyond serving targeted offers, Cardlytics also sells anonymized data packages through its insights product.

For instance, Cardlytics can track market share by ZIP code or where a consumer is spending money both inside and outside of a particular advertiser’s store. Laube was quick to note that the packages are comprised solely of non-PII segments.

In addition to increasing awareness, Cardlytics is using a portion of the money to beef up its board membership with agency vet and industry heavy hitter Tony Weisman, CEO of DigitasLBi North American, and to prepare itself for a possible IPO possibly by the end of 2015.

“We want to make sure we have a strong balance sheet so we can take advantage of a potential IPO within 12 to 18 months,” Laube told AdExchanger. “We’re starting the process now. If the window is there when we’re ready, we’ll go with it. If not, we’ll wait. We’re not in a hurry.”

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