Introducing Kalder as a New Paradigm in Loyalty Rewards - Why We Invested

Javelin VP
6 min readNov 20, 2024

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Life is not easy for marketers today, with paid channels increasingly crowded and alternative models like content marketing seeing the noise level rise to a fever pitch. At a loss for efficient new sources of customers, marketing leaders frequently turn to loyalty as a means of driving growth from an existing customer base. At first glance, a loyalty program looks like a brilliant solution, with straightforward costs and ROI that is easy to pinpoint.

But loyalty is hard, believe us. With firsthand experience building several large scale network loyalty programs, including MyPoints and Payback India, we can attest to the fact that everyone has a loyalty plan until they get punched in the face, to quote the omnipresent Mike Tyson. And yet, with the right approach, the payoff to a well designed, professionally executed loyalty program can be spectacular. That is the fundamental reason we invested in Kalder, a new fintech-enabled, digitally powered, turnkey platform that fulfills the true promise of loyalty for most brands.

In the US, the average consumer has 17 loyalty cards, but only about half of those are actively utilized. This is a trend that transcends globally as well — loyalty card usage is lower than expected and 77% of loyalty programs that solely rely on a transactional model do not achieve their desired outcomes. ROI is hard to achieve, primarily due to limited adoption, complexity and tepid customer value.

There are several reasons why loyalty programs don’t get enough signups, initial interest tapers or they fail to turn a profit:

  • Unappealing rewards — Mismatch between customers’ loyalty ‘wants’ and what the program offers
  • Long time to attainment — An unreasonable number of friction points (mail/sign-up forms, high total spend requirements, high points requirements for redemption, etc.) create hurdles to user conversion and adoption
  • Ineffective use of customer data — Programs often fail to utilize the data collected on purchase behavior, interests or intent, thereby missing the opportunity to personalize user programs to drive higher engagement
  • Rewards lack versatility — A paucity of aspirational, exciting or fun experiences or perks
  • Technical hurdles to omni-channel experience — Rewards can be difficult to redeem in-store, online, via social media, or other channels seamlessly
  • Cluttered and poor user interfaces — Confusing layouts of rewards, points and levels create a hazy value proposition for the user
  • Inability to meet consumers where they are — Poor marketing campaigns, weak promotion or the lack of a convenient loyalty mobile app

But what if loyalty cards could live on our smartphone wallets with seamless brand integrations, and loyalty rewards could be available whenever one shopped at their favorite brand? What if brands could give their best fans and loyal customers an offer of rewards they could immediately use, without pesky sign-up forms or multi-step enrollment processes?

Kalder solves for all the above, allowing quick setup and launch of customizable reward programs, with comprehensive data integration on customer spending to enable effective brand marketing and loyalty strategies. Kalder makes this possible by combining commerce storefront integrations with mobile wallet enablement for stored-value member cards. The result is a turnkey loyalty solution that is seamless, all digital and highly cost-effective.

Kalder allows merchants to provide cross-partner rewards, branded debit/credit cards, discounted merchandise, VIP experiences, gamified end user engagement leaderboards, and more. All the engagement and member data are captured by Kalder, via its loyalty CRM. Integrated AI helps determine best personalized offers, dynamically adjusts reward exchange rates for brands to optimize reward sales and streamlines reporting and financial analysis. With Kalder’s headless commerce API, brands and retail teams can spin up a complete loyalty solution seamlessly, often without any adjustments required to any of their existing programs.

Kalder’s fundamental vision is to enable its customers to turn loyalty into a profitable model with branded stored-value cards and associated rewards, akin to a closed loop banking system. Utilization of pre-loaded member cards enables brands to save 4–5% on credit card fees on a gross basis. To enable this payment method, brands/merchants transform loyalty into an engaging ecosystem with strong end-user utility as customers spend and visit more to realize greater rewards value.

For brands, the financial returns to loyalty have the potential to emulate those of leading programs in the travel, finance and retail segments, exemplified by the massive returns of United Airlines Mileage Plus ($22.6B in cumulative rewards sales across 100 million members) and Starbucks ($2.1B pre-loaded cash in Starbucks wallets earning $212M in annual interest).

The key to unlocking such spectacular returns often lies in the ecosystem model. By opening their rewards programs to partners, brands can leverage the power of their superfans to engender a network effect. Kalder delivers this capability by offering a scalable cross-partner rewards exchange, where brands can partner with non-competitive merchants to grow their overall loyalty utility.

The cross-partner rewards exchange helps brands to monetize their partner network in new ways by aligning marketing budgets for new customer acquisition. Partners allocate spend toward brands in their network that can efficiently introduce new customers. Brands choose their preferred partners (instead of relying on Rakuten or other pre-selected partner offerings) and garner an additional revenue stream via the cashback incentives funded by partners..

For example: an airline partners with a chocolate brand to allow miles to be used to purchase an irresistible delicacy. Every time a new customer to the chocolate brand redeems this reward, the brand compensates the airline for the introduction to the new customer. In some cases, the payment is offered regardless of whether the customer is new or existing, akin to an affiliate fee for fostering the sale. In Kalder’s experience, an average mid-sized brand can earn $150K-$450K in monthly cash earnings from a rewards exchange. An inspiration for Kalder founder, Gökçe Güven, to design the platform to enable such network partnerships is S.L. Benfica’s epic loyalty program that resulted in over $88 million in annual processed transactions and $4.4 million in new commission revenue from 67,000 linked cards across 4,000 retail partners. The value of an ecommerce customer base thus can grow momentously thanks to the ecosystem model.

Every marketer’s dream is to gain the benefits of customer loyalty without the cost and complexity of a new rewards program and Kalder is the first to deliver on that promise with a turnkey solution that aligns with the marketing calendar to impact conversions in real time. By turning loyalty into a marketing/promotional tool, Kalder turns a historical cost center into a profit source, whilst eliminating much of the complex overhead required in managing traditional loyalty programs.

Kalder was founded by Gökçe Güven, who after product and design experiences at OpenSea, Robinhood, and Celo, saw the massive opportunity to de-centralize access to cross-partner rewards by rethinking traditional silo-ed loyalty structures.

As old hands at the loyalty game, it’s especially difficult to back a company that reminds us of the challenges and hurdles of building programs from start to scale (some might call it ‘scar tissue’). Kalder blew away all our preconceptions about the cost and complexity to implement and grow loyalty programs for a brand, relegating those tough memories to the past. As we look ahead, the Javelin team is incredibly excited about Kalder’s growth, the massive market opportunity and the mission of providing a better experience in loyalty engagement that consumers deserve.

And lest we forget, they are hiring — open roles are posted here!

— Noah Doyle and Tasnia Huque

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Javelin VP
Javelin VP

Written by Javelin VP

Early stage venture capital with the culture of a start-up and the spirit of die hard entrepreneurs