as being related. Davis argues that Swipely stands out from the pack because its product uses existing infrastructure (credit-card payments) instead of requiring a new way to pay; and because it’s going after neighborhood stores in the $1-million-a-year-in-sales range, rather than micro-merchants or big brands.
What’s more, the startup’s business is picking up. Swipely says it now has hundreds of merchant customers that are doing a quarter-billion dollars in annual sales through its system.
But what about the big challenges in the sector? I asked about consumer privacy. “We take it very seriously,” Davis says. “We’re trying to help restaurants and local businesses with information they already have. And we’re not revealing anything [like e-mail addresses] without the consumers’ consent.”
And on the “signing up merchants” side, it must be hard to get their attention, given all the noise around marketing analytics, loyalty, and payments?
“When we first started talking with merchants, they were inundated with daily deals and wanted to understand what we’re doing and what differentiates us,” Davis says. “One thing is, we don’t cost anything. Technically, [our typical] merchants are already paying close to $2,500 a month to accept credit cards. It doesn’t cost anything to upgrade to Swipely. They pay us essentially what they were paying the old-fashioned payment processing companies,” he says. “The other thing that helps us cut through the noise is, we don’t require changes in their behavior. We just lean into what’s already there.”
Still, the startup faces its own marketing challenge of getting more businesses to know about Swipely (and try it out). Davis seems up to the task. The well-known entrepreneur and angel investor started his tech career at Netscape in the late 1990s and then co-founded voice-applications firm Tellme Networks, which was acquired by Microsoft for around $800 million in 2007.
Swipely has raised about $8.5 million in venture and angel funding to date. The company has more than 30 employees, but hasn’t raised money since 2010 (a $7.5 million Series A round). Davis adds that he’s planning to ramp up sales and marketing and expand Swipely to “upwards of 60 people” in the coming year.
So is there a big new financing round in Swipely’s future? Davis basically said yes, without giving away the details. “I’d be kidding if I told you I was going to double or triple the size of the company without having the capital,” he says.
