Seattle startup Tango Card has raised $10 million to speed up the expansion of its digital rewards platform.
Previous investor Western Technology Investment is responsible for 100 percent of this round of funding, which is coming in the form of debt rather than equity. Tango Card CEO David Leeds said the company is on a clear path to profitability, and he didn’t want to give up any additional equity.
This latest round brings Tango Card to approximately $19.5 million raised since its 2010 founding. The company plans to use the money to pursue international expansion and speed up the launch of new products.
Tango Card aims to make it easier for companies to provide digital rewards, whether it be a gift card to a well performing employee, an incentive for signing up for a service or a nonprofit donation in a partner’s name. Businesses spend billions annually around the world on these types of rewards, but Leeds said the system is in need of change.
“There are 2 million companies globally that use rewards and incentives, and a million of them are do-it-yourselfers,” Leeds said. “Picture a head of HR in a company of about 100 people; if they have a reward or recognition program, they may literally have a drawer full of gift cards they give out on a daily, weekly, monthly basis.”
Tango Card partners with more than 2,000 companies big and small, global and local. At Microsoft, Tango Card helps power the rewards platform in which customers earn points that they can redeem for products and causes. Remitly, a Seattle startup that lets people send money to family members abroad, uses rewards to encourage people to make their first international transfer.
Tango Card’s headcount has tripled in size over the last three years. It has 70 people working out of its headquarters in the West Seattle neighborhood, and another eight people at an engineering center in Boise. Leeds said Tango Card plans to hire another 10 people this year.
The idea for the company came to Leeds as he was looking into the concept of payments over wireless networks. He found that gift cards were the fastest growing type of payments for both consumers and enterprises. The company has pivoted a few times since it launched. Initially, the company started with its own gift card offering but later moved away from it.
Tango Card categorizes its offering as a “rewards as a service” platform. The company just recently launched 2.0 versions of its rewards delivery platform and an API that helps businesses manage digital rewards. Later this year, Tango Card plans to launch its first self-service products with more of a web-based interface.
Managing digital rewards can be a tough business, as it requires a large inventory of incentives, including everything from Amazon gift cards, to digital rewards in places like China to nonprofit donations.
“In some cases, companies will start with sending a single gift card,” Leeds said. “What they find is that their customers are typically saying ‘that’s great but we want a choice or a selection.’ So ultimately providing that selection can be very complicated and that’s when companies typically work with us, when they have a reward or incentive program that needs some more management.”