Toronto-based mobile rewards platform Drop has raised $59 million (US$44 million) in a Series B financing, bringing total funding to $95 million (US$71 million).
The round was led by existing investor HOF Capital, a New York-based venture firm that operates as a life-cycle partner to global tech companies.
HOF was joined by New Enterprise Associates, Sierra Ventures and White Star Capital, all of them investors in last year’s Series A financing. RBC, Canada’s largest bank, also signed on as a strategic investor.
Drop’s other backers include ff Venture Capital, Plaza Ventures and Portag3 Ventures.
Founded in 2015 by Derrick Fung, Darren Fung, Cameron Dearsley and Akhil Gupta, Drop provides a free app that allows users to earn cash rewards on their purchases with more than 300 merchants. In addition, it connects brands with shoppers, including much sought-after Millennials.
To date, users have earned nearly $19 million in rewards, Drop reports. The company’s brand partners, including Expedia, Glossier and Postmates, have generated more than $350 million in sales.
A key to these results is Drop’s application of machine learning to users’ transactions, CEO Derrick Fung said in a news release. This enables personalized offers for shoppers and gives brands a “more complete understanding of their customers and competition,” he said.
The Series B follows Drop’s late 2018 buy of Canopy Labs, a Toronto-based predictive analytics software provider backed by BDC Capital, Valar Ventures, Y Combinator and others. Drop made the acquisition to boost its machine learning capabilities.
Drop will use the funds raised to add more users and partners, introduce new product features, and expand its teams in Toronto and New York. It will also push into new markets, including the United Kingdom and Australia.
Fung was an entrepreneur-in-residence with White Star prior to Drop’s launch. Before then, he founded and led Tunezy, a Toronto-based e-commerce platform for musicians acquired in 2013 by SFX Entertainment.