Getting Here is Easier and Faster
This startup is helping shoppers earn more rewards with every card swipe, effortlessly maximizing cashback and perks. Want to know how?
Project Overview
Kudos offers people the chance to earn more rewards for purchases they would have made anyway.
To do this, you can continue shopping anywhere online. Just add all your cards to the Kudos app (wallet) and then install the Kudos extension for your browser.
When filling out the payment form, Kudos will automatically populate the form with card details. But which card will it use? After all, most people have multiple cards, or even many, in their wallet.
The main feature of this startup is that it automatically fills in the payment form with the card that offers the highest reward for that particular purchase, such as cashback, at that specific store. However, users can change the default selection by opening a menu directly in the payment form and choosing a different card from the list of all cards added to the Kudos wallet.
The challenge lies in the fact that different banks constantly run promotions with various retailers, offering higher rewards. Keeping track of all these promotions can be a hassle, but Kudos takes on this tedious task, handling it for users.
Kudos runs its own promotions with retailers, offering extra rewards for purchases made through the platform.
If a person shops on a retailer's website participating in a Kudos promotion, the platform offers an additional reward matching the cashback provided by the bank.
Kudos ensures its profitability by earning a commission from retailers for facilitating purchases through its platform. This reward is given for promoting the retailer’s offerings to Kudos users, driving more sales and brand visibility.
If someone is planning to make an expensive purchase where every reward point counts, they can turn to the app for advice. Kudos will recommend which bank and card to open in order to maximize rewards for that specific purchase. Additionally, Kudos monitors all purchases and may proactively suggest opening a new card that offers higher rewards for shopping at the same retailers.
MariaGPT, an AI assistant developed by the startup, is responsible for providing these recommendations. It stays up to date on the rewards programs of over 3,000 types of cards issued by U.S. banks.
I first took notice of this startup in the fall of 2022 when they launched their app and raised their initial funding. Today, they have 200,000 registered users, making purchases through Kudos totaling $200 million annually.
Recently, Kudos secured $10.2 million in new funding, bringing the total investment in the project to $17.2 million.
What’s interesting Kudos offers real, practical value to owners of multiple cards. But can this feature alone build a billion-dollar company?
It seems unlikely that Kudos could become a billion-dollar company with just this feature. That’s why Kudos continues to evolve:
The AI assistant, MariaGPT, is set to become a comprehensive tool for all personal finance-related queries.
Moreover, Kudos plans to launch a marketplace for booking flights, where users can pay with the rewards they earn through the app. And I think they won't stop at just flights.
In fact, many fintech services develop gradually in this way. They start by offering a simple, useful feature that attracts users—cardholders, shoppers, or payers. This helps them build an audience, which they can then leverage to roll out more complex and profitable products.
For example, this is the path taken by the Indian startup FPL Technologies, which I wrote about back in 2020. Initially, they launched a free app called OneScore to help users check their credit score.
A year and a half later, they began issuing co-branded OneCard credit cards in partnership with several Indian banks, targeting the audience they had built.
They are doing this under the name OneConsumer, claiming to be "serial" brand creators in the financial market. So, I believe their product line won't end with OneScore and OneCard. In total, the startup has raised around $240 million in investments for these two products.
Flash, another Indian startup, which I wrote about last autumn, is at a similar stage as Kudos today and has also raised $12.5 million for development.
It offers users the option to create a special email address in the domain flash.co, which they can use when registering in online stores. This way, all notifications and newsletters are directed to this email instead of their regular one. This provides two key advantages:
First, all purchase notifications are separated from spam and neatly organized, allowing users to easily see a list of their orders, delivery dates, and purchase history.
Second, the service analyzes the user's purchases and displays relevant offers from newsletters and even from other online stores that haven't sent them anything directly.
Another example, surprisingly also from India, is the startup Khyaal, which I wrote about last autumn. The company claims to have created the "number one app for seniors," where users can find educational courses, consult with experts for help with common issues, shop on an integrated marketplace, and even find part-time jobs with companies willing to benefit from the experience of older individuals.
By gathering an audience in this way, the startup began offering them a credit card issued by a partner bank under the Khayaal brand. This helped the startup raise $10.6 million in investments, $4.2 million of which came in February of this year, after my review.
Where to go next? In several past reviews, I've written that financial services are a great way to scale vertical cloud services and marketplaces. But why take such a roundabout path if, in the end, we will inevitably end up in the financial services market anyway?
Indeed, the path to the financial services market can be made more direct, simple, and short. It’s possible to start with much simpler tools that are immediately related to spending and finance but provide additional value and convenience—thus building an audience for them. Once the audience is established, you can begin offering financial products that allow you to profit from transactions and credit.
Therefore, the general direction for growth could focus on coming up with or finding small, useful tools related to purchases, spending, and credit. These tools can then naturally lead to offering credit cards or loans, either directly or through partners.
The current Kudos model is quite clever in that it’s useful only to people who already have multiple bank cards or are ready to open new ones regularly. These are typically two categories of people:
Those with enough money to spread across many banks.
Those with insufficient funds, constantly refinancing with new banks to cover old debts.
From the perspective of financial services, both audiences are valuable. One needs help managing spending, while the other requires access to credit. So, this approach can certainly work.
Alternatively, you could come up with another simple but useful tool related to purchases, spending, or credit. What ideas come to mind? What could be convenient for you personally?
About the Company
Kudos
Website: joinkudos.com
Last Round: $10.2M, May 17, 2024
Total Investment: $17.2M, 3 rounds