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Mexican startup Reworth announced the closing of a $2.8 million seed round.
Reworth seeks to help banks and fintech companies activate their passive customers by connecting them with merchants through cash rewards, or cash back; that is, the possibility to return a percentage of a customer’s purchase through a fully integrated API.
The round was led by the Latin American VC firm ALLVP, with the participation of New York-based FJ Labs; Soma Capital, based in San Francisco, and Gilgamesh; also based in New York.
This new round brings Reworth’s total raised to date to about $ 3.2 million. The company is just over a year old and so far has 1.3 million users.
The rewards strategy
According to research by Aberdeen Group, a leading analyst firm, companies that offer rewards (such as cashback) “can generate more annual revenue and higher profitability per customer.”
Specifically, rewards-based promotions can outperform discounts by generating better purchase intent and increased sales without damaging the brand’s perception if they do discounts.
The service offered by Reworth is an API integrated into the bank’s app that allows cash to be immediately returned to users’ bank accounts.
It is a key incentive for the banking sector and fintech companies. Rewards make customers more likely to make payments with a debit or credit card or a mobile app, thus eliminating the need to use cash.