Israel’s Yotpo buys US start-up Swell Rewards

Israeli tech company Yotpo has announced the acquisition of US start-up Swell Rewards. According to sources close to the deal, the acquisition price is $16 million. This is Yotpo’s first acquisition.

Yotpo has developed a platform for e-commerce brands enabling them to market themselves through display of surfers’ opinions, pictures, ratings, reviews and video clips. The acquired company, Swell Rewards, has developed a customer loyalty club platform that facilitates rewarding customers through the award of points. The acquisition of Swell Rewards is intended to enable Yotpo to reward surfers who create content for brands to make sales. Yotpo and Swell Rewards were already collaborating with each other to reward customers whose reviews helped sales.

“When we started to talk to more and more customers, they told us that it would help them if we connected our surfer content platforms to a loyalty and referrals platform, a customer loyalty club platform like that of Swell Rewards,” says Yotpo CEO Tomer Tagrin. “Many of our customers have realized that in order to succeed they had to ensure that their customers would return again and again, and so they want a customer loyalty club that rewards returning customers or customers who refer their friends to them.”

In the wake of that realization, Tagrin says, Yotpo integrated the platforms of several companies that operated customer loyalty clubs into its own platform, among them that of Swell Rewards, but they quickly realized something else: “We started to understand that there was deeper potential in data gathered between the platforms, but to realize it I needed a platform that I owned outright.” The connection between the platforms is meant to create a new rewards system for customers’ contributions to a company’s marketing effort: “For example, if you posted a picture, and over time it runs out that this is one of the pictures with the greatest value for the store – everyone who sees it buys – then I want you to receive more points as a member of the customer loyalty club, even if you haven’t bought anything else.”

Yotpo was founded in 2011 by Tagrin and Omri Cohen. It has raised $101 million and it employs over 300 people at its offices in Tel Aviv, New York and London. Swell Rewards is a bootstrap company which Tagrin says is neither profitable nor loss-making. With the acquisition, Swell Rewards’ office in Boston, where 15 people are employed, will become and additional office of Yotpo.