Switchfly lands $15M for streamlining loyalty points

StarVest, Azure, Canaan jump aboard the travel reward redemption business

Travel rewards redemption business Switchfly announced Thursday that it has raised $15 million in Series C financing. The company formerly known as ezRez received this round led by StarVest Partners with Azure Capital Partners and Canaan Partners which brings the total capital raised to $32 million.

The San Francisco-based Switchfly is a software company that creates a loyalty redemption program and platform for travel and hospitality brands to book customers online. Switchfly pulls together the reward redemption options for more than 300,000 travel suppliers, including AirAsia, American Airlines, United Airlines, Starwood Hotels, Intercontinental Hotels, JetBlue, American Express and PayPal. 

Switchlfy estimates that $750 million in travel transactions spanning 100 countries are processed through this travel platform each year.

The Vice President of Marketing for Switchfly, Dario Ambrosini, thinks that creating a strong and specialized booking website is a key tool in capturing a loyal audience that might otherwise go to discount services like Expedia or Travelocity.

"We have the expertise to build these platforms and assure each business can easily incorporate their own brand loyalty programs at an affordable and maintainable rate," Ambrosini told me in an interview. 

This is a key element that has helped Switchfly experience 50% growth year over year -- customizing booking platforms rather than squeezing their information into formulaic templates like you see on the deal sites.

"While people might think that they are booking on the Starwood or American Airlines website, we have gone in and built a site for them since we have gained the expertise in layering all the travel deals, analytics and programs needed," Ambrosini explained.

Switchfly plans to use the new funding to accelerate product development and further expand its global operations. 

Currently, Switchfly's platform allows loyalty program members to book any type of travel with points and cash, all under the loyalty program’s brand, giving the member greater flexibility and more opportunities to utilize their hard-earned miles.

The company states that, collectively, more than 20 billion reward points are redeemed through its service annually and Switchfly’s major products are available in 50 currencies and 25 languages.

Later this year, Switchfly plans to unveil a new digital wallet product, in partnership with PayPal, that will allow loyalty program members to use points to pay for merchandise and services anywhere PayPal is accepted.

The company is also looking forward to implementing new social and mobile products for their recently acquired company: Topguest. The new products will include engagement on Foursquare, Facebook Places and geo-located tweets.

As travelers continue to get more thrifty with their vacation plans, accomodation enterprises have been partnering with tech companies and Web platforms to assure that they capture as many customers as they can.

Earlier this year, six global hoteliers banded together to create a search engine for travelers to find the hotel experience that best fits them.

The new endeavor was named RoomKey.com and allows prospective customers to search, much like an Expedia or Travelocity, but specifically for hotels and is merely a tool -- the user then is directed to the website of the hotel chosen rather than booking through a third-party.

The hotel companies are aiming to offer travelers a ‘personalized experience’ and for their accommodations and stress that the hotel one chooses is more critical and diverse than the airline carrier or the rental car.

Choice Hotels International, InterContinental Hotels Group, Hilton Worldwide, Hyatt Hotels Corporation, Marriott International and Wyndham Hotel Group are the hoteliers that have grouped together to create this search tool.

Similarly, the brands that have joined forced with Switchfly are looking to maintain the loyalty of customers familiar with their brand, in as many ways as possible.