Augeo is an independent engagement and loyalty platform company that works with organizations to engage their most important constituents: customers, employees, and members. The company also provides actionable insights from data to personalize the user experience and optimize business outcomes. In addition, it offers card-linked customer experiences, transactional analytics, digital marketing, and social interaction services. The company has seen double-digit growth each year for over a decade and continues to serve more than 300 clients outside of financial institution loyalty.
Recently, Augeo announced the sale of its financial institution loyalty business unit to investment funds affiliated with Lightyear Capital, a New York-based private equity firm. The transaction closed September 25th. Raymond James served as the investment bank for the transaction.
David Kristal, Augeo CEO, said of the deal, “The sale of this business unit, which represents approximately one-third of our overall business, marks a first for Augeo, as we have been hyper-focused on growth and strategic acquisitions for many years. In 2012, we acquired the first of two companies in the financial institution loyalty sector. Since then, we have invested heavily in technology and operations, more than tripling the acquired revenue, and establishing a leadership position in the space.”
He continued, “We have persistently challenged our product design and thinking, resulting in frequent product innovations in the many sectors we continue to serve, including customer loyalty, employee recognition, and membership platforms. We are rapidly expanding our card-linked marketing business and growing this leading fintech platform, with more than 30 million cardholders currently using our solution. Moving forward, we will continue developing technology to advance with our clients, build elevated reward interfaces, strengthen social connections, and design optimized user experiences.”
Mike Knoop, who has led the FI business since 2015 and who will become the Augeo FI CEO as part of the sale, added, “The financial institution loyalty division has experienced consistent growth year over year in the rapidly advancing market of card-based loyalty and we are excited to further expand our services and proud to continue representing so many great banks, credit unions, and partners as a standalone company in Lightyear’s portfolio. Lightyear’s investment reinforces our continued advancement as a leader in the market. With this additional capital, we’ll be able to expand our capabilities, such as our pay-with-points offerings, and continue to invest in technology to deliver sophisticated and customized reporting back to our clients, giving them actionable insights they can use to better understand and serve their customers.”
Mark F. Vassallo, Managing Partner of Lightyear, also offered comments. “With a proven ability to improve account growth and activity, Augeo FI has achieved a leading position helping middle-market banks and credit unions meet their individual clients’ needs. We are excited about the expansion opportunities for Augeo FI, especially as credit and debit card transaction volume and rewards card usage continue to rise. The business already has significant momentum, and we look forward to working with the Augeo FI management team to invest in and grow their business.”
In a recent discussion with Loyalty360, Kristal said that he views the sale as an opportunity. “It is unique in that we have an opportunity to really double-down on our core business. We retain the majority of Augeo, and the same time, we’re able to sell a very fast growth part of our company to a private equity firm that has terrific experience and track record in the financial services sector. So, not only do we have an opportunity to double-down on our growth, but so does the Augeo FI business. So really, it’s a win-win for all of us.”
When asked about the future of the company, Kristal beamed. “We really have an extraordinary spirit of innovation and entrepreneurship, and part of it is because we’re brutally honest internally. We’re very objective in terms of how we assess impact and value and so it’s those kinds of attributes among our leadership team that have really helped to drive our growth. It’s interesting, because this particular transaction, if nothing else, is an extraordinary tribute to the talent, to the culture, and to the drive of our team. From that standpoint alone, it’s a wonderful celebration.”