San Francisco-based BankOns, an early stage mobile startup, has been acquired by Capital One and will now be incorporated into Capital One’s Digital Labs. This very young company was founded in summer 2010, and launched in May 2011, with the aim of offering tools that would allow banks to reward users based on their geo-location and their purchase history.
Investors in the company include Dave McClure’s 500 Startups and financial consultant Mark Greenough, who had put in during the friends and family seed round. The amount of the seed round nor the deal terms were disclosed.
However, McClure says that the deal was a quick acquisition, and was good for 500 Startups.
The company was founded by Joshua Greenough, who, prior to BankOns (think “bank + coupons”), served as VP of Operations at social commerce network PowerReviews. And yes, Mark and Joshua are related – they are father and son.
For those unfamiliar, BankOns is something of an anti-Groupon, in that it’s not focused on enticing new users to try a business or service by offering a deeply discounted deal, but is rather rewarding local customers based on their spending history. The company made its debut last spring at the Finovate Conference in San Francisco, where it won “best of show.” (That same conference is starting up in San Francisco again tomorrow.)
As Joshua explained last year, “financial institutions are able to connect with their customers on daily basis whenever the customer checks their smartphone for anything from a bank balance to directions to their favorite restaurant,” he said. “The power of our platform to link transaction data to a customer’s location makes it possible to deliver highly targeted and welcomed offers, creating new and repeated revenue opportunities for financial institutions and savings opportunities for consumers.”
Here’s how it worked: After you created an account and entered your bank card login data, Bankons, which was built on top of Yodlee, accessed your transaction history to determine your spending habits and find the nearby deals best suited for you. Bankons utilized your transaction history as well as other local deals like Foursquare, which it could also use to verify your location. And the app allowed you to search for any zip code even if you were not currently in it, and then save the offers you liked.
For financial institutions, the service was an interesting value-add, because it could offer a feature set beyond balance inquiry in their mobile apps, which is what banks are actively in search of; meanwhile, for consumers, the app appealed because it would showcase more relevant offers based on their own behavior.
Capital One, which purchased Bankons for an undisclosed amount, acquired both the intellectual property and talent from Bankons. Greenough will now serve as Senior Director of Capital One’s Technology Innovation in San Francisco following the acquisition. (Capital One’s Labs are a new group that does rapid prototyping, incubation, and testing of product ideas before they are rolled out to customers.)
In a statement, Capital One says: ”the combination of our Lab and the strengths of the Bankons team will add to the talented Digital Innovation Lab team and help accelerate the Labs innovation and rapid prototyping agenda at our innovation labs.”
Through Capital One Labs, the former Bankons team now has access to Capital One’s customers – all 45 million of them – a number, Greenough says that most startups can only dream about.