Groupon's initial public offering turned its founders—Andrew Mason, Brad Keywell and Eric Lefkofsky—into billionaires.
Now the low-key Keywell and Lefkofsky are pouring more than $1 million in a Chicago-based startup Belly through Lightbank, their investment vehicle.
Belly, formerly known as "Bellyflop," aims to replace traditional loyalty punch cards with a more personalized—and digital—approach. (The name Bellyflop came from one of the founding team's initial loyalty platform ideas, which would involve customers playing a game. One in 25 would win a prize; the other 24 would flop.)
The company, launched in August, uses iPads and mobile apps to track customer visits and offers some novel prizes. (Among them: punching the owner of Chicago's AlleyCat Comics in the stomach, 10 minutes of all-you-can-eat cupcakes at Molly's Cupcakes and a chance to egg the Gaztro mobile food wagon as it cruises by.)
How it works: The company installs an iPad in retailers' stores to track customer visits. The customers then scan a bar code on the Belly mobile app, available for both iPhone and Android. (Customers can also choose a physical "Belly Card," which can be used for any business signed up with the company.) A message pops up instantly on the iPad, letting the customer know if he or she has won a prize.
“Other reward programs don’t effectively cater to both consumers and businesses, and most are horribly ineffective,” said Belly co-founder and CEO Logan LaHive in a statement. “Consumers don’t want to carry several different cards.”
So far, Belly is in nearly 300 businesses in Chicago and is adding some 50 new ones per week. The app has 18,000 users who've logged some 50,000 check-ins—and the company says merchants are seeing more check-ins from Belly than from Facebook, Foursquare and Gowalla combined.
Belly currently is only available in Chicago, but it will launch nationally in 2012.
Keywell and Lefkofsky, who both attended the University of Michigan as undergraduates and law students, also co-founded analytics platform MediaBank and tech outsourcing firm Echo Global Logistics. Both are close advisers to Andrew Mason, their outspoken Groupon co-founder and the company's CEO.
Belly's CEO LaHive, 29, has spent more than seven years working in tech startups, including DVD rental service Redbox, which in 2010 rented its 1 billionth movie. Coinstar bought 47 percent of Redbox in 2005 and the remainder in 2009. But Redbox's explosive growth made it "significantly less entrepreneurial," LaHive said in an interview earlier this year. So he applied for an opening Lightbank posted on Twitter, looking for someone to develop a customer loyalty program. His title: "founder-in-residence."