Leal, a Bogota, Colombia-based retail tech company providing customer engagement in Latin America, raised $5 million in a round that CEO Camilo Martinez called a “pre-Series B.”
LEAP Global Partners and Rakuten Capital co-led the round and were joined by Morro Ventures and Salkantay Ventures. The round comes about two years after the company raised $10 million in Series A capital, this one co-led by Rakuten and IDC Ventures. In total, the company has secured $20.5 million in venture-backed capital.
Leal works with business-to-consumer brands, e-commerce sites and financial institutions across Latin America to enable merchants to create a customer database to then offer cashback and rewards products to loyal shoppers on everyday purchases.
To do this, Leal has built integrations with 160 different point-of-sale systems. Most of the POS systems are local, however, Leal worked to integrate with big players in the United States and Europe that aren’t widely used in Latin America due to cost, Martinez told TechCrunch.
Also, merchants can track customer behavior and purchasing patterns for customers who traditionally pay with cash, a payment method notoriously known for being difficult to track. They also have access to campaign management tools for targeted communications.
Martinez started the company in 2016 with Florence Frech, COO. At the time, the company was on “an amazing growth journey,” according to Martinez. Then the global pandemic happened.
“We lost 85% of our merchants,” he said. “We were heavily reliant on brick-and-mortar retailers. Lockdowns were some of the strongest ones after Asia, for example, over six months. We almost had to rebuild our business from 2021 onwards because we had no clients.”
Leal got its groove back. In 2021, the SaaS marketing company launched a new feature for grocery shoppers to scan paper receipts and earn Leal Coins that could be redeemed for goods and services like gasoline or food deliveries via Rappo. A year later, Leal expanded its rewards program throughout Mexico, Colombia and Central America.
Today, the company works with more than 1,000 brands across 15 industries and in eight countries. Its customer list includes Subway, Verifone and Chevron. Leal has more than 6 million users, up from 1.5 million in 2020, of which 3.5 million active users joined in the last 12 months.
“We've been developing a lot of gamification, so we can service our consumers in different ways,” Martinez said. “There's an engagement path and smarter conversation tools so you're not getting transactional messages, but you're getting more human-like conversations. We've also been working on different marketing solutions to engage the consumer so we can be closer to their lifestyle and bring them bigger value.”
With the new investment, Leal plans to reach $10 million in annual recurring revenue, focus on additional penetration in Mexico, omnichannel communications and a set of tools that includes smarter data collection and interactions, and automation of benefits to maximize conversions.
It will also work on technology development to improve its artificial intelligence models for further personalization of app rewards and benefits. Martinez also wants to leverage generative AI for enhanced chatbot interactions between brands and consumers.
“Two of the channels we're going to strengthen are WhatsApp and Facebook Messenger so we can have other sources on how to communicate with the consumer,” Martinez said. “With AI and GenAI, we can make better predictions with the data. We can increase experimentation and launch hundreds of different campaigns for customers to see what's sticking with the consumer and then iterate with different AI models. We are also going to work on content creation so our platform is more personalized and automated to require less human intervention and be plug-and-play.”