It’s a difficult time for small businesses — to put it mildly. And Fivestars CEO Victor Ho said that many of the big digital platforms aren’t really helping.
Ho argued that those platforms (whether they offer delivery services, user reviews or marketing tools) all have the same underlying model: “They seek to take over a small business’ customer base and then charge them a tax to start reaching those customers.”
Superficially, a company like Fivestars, which has created software to support small business payments and marketing, might not sound that different.
But Ho said that the startup actually takes the “opposite” approach, because Fivestars isn’t trying to build up a big “walled garden” of its own customers that businesses pay to access. Instead, businesses pay for the software, which they use to build a database of their own customers; they don’t have to pay to reach those customers.
“The incentives are more aligned,” he said.
The Fivestars platform includes its own payment product, integration with other point-of-sale systems, marketing automation that delivers personalized messages to customers and a broader network of 60 million shoppers, allowing for cross-promotion across different Fivestars businesses.
The startup is announcing today that it has raised $52.5 million in new funding, combining a Series D equity round as well as debt and bringing its total