Tibco buys Loyalty Lab for $25 million

Software giant expands its loyalty services for airlines and major retailers

Tibco  is buying Loyalty Lab, a San Francisco-based provider of loyalty programs for major consumer brands, for $23 million in cash, plus debt.

The deal helps Tibco expand its customer-retention services to existing customers, such as airlines and large retailers.

"Their technology can get the right offer to the right person," said Mark Goldstein, founder and Chairman of Loyalty Lab, in an interview with me. "In combination with their messaging platform and our loyalty analytics and professional services, you have a complete product."

Especially with the emergence of geo-location and social services offered by Foursquare, Shopkick, and Loopt, brands have become increasingly interested in working with loyalty programs to track their existing customers.

"Loyalty programs act as the glue to connect brands," said Mark. "Without a loyalty program, brands can not tie together buying and visiting behavior into one data customer model because without a consumer opt-in it is in violation of privacy laws."

Mark said he will be staying on to work at Tibco and its CEO Vivek Ranadive. (See picture from a Christmas party on right. Vivek on the left, Mark on the right.)

Loyalty Lab's client list includes major brands, such as Zynga, Sears, Crate & Barrel, General Mills and Virgin America. One loyalty program for Zynga and General Mills enabled customers to get Farmville points in exchange for General Mills' spinach purchased. 

Loyalty Lab is a 50-person startup that launched in 2004, and has raised $11 million in venture capital. Mark, whose background includes running Kmart's loyalty program, owns 40% of the startup.