Leal secures convertible note for US$2 million through FCP Innovación SP

Contxto – Colombian startup Leal wants to help brands build on customer loyalty. And it recently raised US$2 million via a convertible note to do so.

Investors included family offices as well as Colombian service provider, EPM, through its corporate venture branch, the FCP Innovación SP.

The startup will use the funds to launch a new service—a cashback marketplace—during this quarter. It will be working with e-commerce platforms, retailers, and other third parties to offer cashback rewards. 

• Related article: Leal, the Colombian loyalty startup, raises US$3 million

Leal’s leadership had intended to offer this marketplace until next year.

Nonetheless, coronavirus and self-isolation led to a change of plans. In any case, its timing is strategic as convenience stores and supermarkets have never been so in vogue and primed to build on their customers’ loyalty.

Leal currently has 2 million users and works with 700 companies distributed among four countries. In any case, the release of its new product will first be in its native Colombia. After this though, launches into Guatemala, El Salvador, and Panama are expected.

Leal versus Covid-19

The coronavirus pandemic has left an impact on virtually every industry. Consequently, as a platform working to build on customer retention and conversion, Leal has been busy helping its businesses cope during the quarantine:

“We’ve focused on working with our brands so they stay in touch with their customers. We’ve been promoting their digital sales channels, and this has helped maintain their sales volume at a time when other companies are seeing little activity,” explains Camilo Martínez, Leal CEO and co-Founder to Contxto.

Martínez also states that while the startup has seen a drop in restaurants as part of its customer base, it saw growth elsewhere.

“We’ve strengthened our position among pharmacies, supermarkets and through these verticals we’ve witnessed an increase in our customer portfolio,” adds the Executive.

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What’s next

Leal plans to raise its Series B early next year and it already has an undisclosed backer to lead the round. Through these funds, the startup expects to achieve multiple goals.

First off, it will continue expanding into new markets. Second, it wants to improve its product by adding some artificial intelligence (AI) tech. Through machine learning, Leal wants to personalize the communication brands have with their customers by curating the content to the person’s profile and interests.

Last but not least, its Series B will also serve to position its new cashback marketplace with a product it had already launched: Leal Coins.

“The third [objective] is to position this cashback service so it’s done through a virtual asset we launched called ‘Leal Coin’,” says Martínez.

Note that these assets aren’t a cryptocurrency but rather an alternative payment method that works only within Leal’s network of businesses.

“So you can then pay with these Leal Coins or use them on an e-commerce site. We’re going to launch with the biggest e-commerce platforms wherein instead of paying with a credit card, you use Leal Coins you’ve saved up as cashback through our different programs,” states Martínez.

By adding its cashback service to consumers’ day-to-day purchases, the startup also hopes to save shoppers money. If that doesn’t create customer loyalty, what will?

Regardless of its recent or upcoming equity capital raisings, Leal may also expand into Mexico, Ecuador, and Peru. However, these developments rely on current negotiations taking place between the startup and local partners in these countries.

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-ML