Andreessen Horowitz bets big on Belly, an offbeat consumer-loyalty startup

What started as a quirky loyalty program at one Chicago comic hideaway has spread to 1,400 locations in nine months, and can now count on the loyalty of one of Silicon Valley’s hottest venture capital firms.

Belly, a digital loyalty program for small businesses, today announced a $10 million round of funding, financed entirely by rapidly-rising Valley heavyweight Andreessen Horowitz.

Belly is the maker of a small business- and consumer-friendly rewards system and universal loyalty card. For a monthly subscription fee, the Chicago-based startup tailors programs around store culture to create rewards. To simplify management, it issues each location an in-store iPad display. Customers can use their Belly card or the Belly mobile app to “scan-in” to locations, earn points for each visit, and view rewards.

The rewards can sometimes be a bit unusual. For instance, at AllyCat Comics, the Chicago comic store where Belly got its start last August, a Belly customer who makes 50 purchases earns the opportunity to punch the owner in the gut.

With a growing but still small presence in eight major markets, including the just-added metros of Boston and New York, Belly needs money for expansion. The extremely young company will use its new funding to expand to new cities, form new partnerships, and hire top-notch engineering talent, founder and CEO Logan LaHive told VentureBeat.

Belly’s premise seems promising enough. Who actually wants to carry around loyalty cards? And aren’t rewards more fun when they encapsulate everything you love about a locale? The problem is trickier to solve in practice, however, and Belly’s current strength is less in its ability to be a universal loyalty card — support at 1,400 locations does not a universal system make — and more in its novelty. There’s something to be said for walking into your favorite boutique, scanning a barcode at an in-store iPad display, and finding out that you’re eligible for something fun.

To date, Belly has attracted 200,000 active users who have checked-in via scan more than 800,000 times. The startup now sees roughly 10,000 store check-ins per day, LaHive said. But competition abounds, so Belly’s biggest challenge will be differentiating itself and finding mainstream audiences.

Belly, which employs a team of 50, previously raised $2.87 million in funding, mostly from Lightbank. Jeff Jordan, general partner at Andreessen Horowitz, former chairman and CEO of OpenTable, and former president of PayPal, is joining Belly’s board.

In the video below, the owner of an Austin, Texas-based frozen yogurt store talks about how Belly has helped her business.

http://vimeo.com/36716602