14 Jan 2020 | 04.44 pm
Pointy To Be Acquired By Google
Business scaled fast with VC backing
14 Jan 2020 | 04.44 pm
Dublin startup Pointy has entered into an agreement to be acquired by Google. The deal is expected to close in the coming weeks.
Dubliner Mark Cummins and Charles Bibby from Essex started the business in 2014. They’d met while doing post-grad at Oxford University and afterwards Cummins worked with Google in California and Bibby designed security systems for the London 2012 Olympics.
Cummins reasoned that local shops were losing out to e-commerce and that there was a way for them to fight back, leveraging the search power of Google. If you type a specific product name into Google, you’ll be referred to e-commerce websites selling that product, but it’s much more difficult to find it in your local stores.
“I particularly remember trying to find some craft beer I’d had at a party,” Cummins recalls. “The only place I could find it was on the internet, even though there was definitely a local store that sold it. If I’d know where that beer was available, it would have been much easier for me to buy it in person than to wait for an e-commerce delivery.”
The founders’ solution was Pointy, a box that plugs into a store’s barcode scanner. The box picks up product UPC codes and uses them to populate a website of the products sold in the shop. These pages are optimised for search engines so that when people search for products they can now see when it’s available in a nearby store – presuming they scroll down the search results.
Pointy doesn’t produce instant results for shop-owners – the store’s inventory is populated online only as items are scanned at the point of sale. The company says its algorithm measures the frequency an item is purchased, with the website assuming that a more frequently purchased item will likely remain in-stock.
Pointy also offers customers a ProductAds features, which creates a customised Google ad for every product the shop has in stock. Thanks to the wonders of technology, the ads can be targeted only at people who are searching for that product within a specified distance from the store. The store owner sets a daily budget and only pay when people click on the ads.
After announcing the Google deal, the founders commented: “Over the past several years we’ve developed a very close partnership with Google. It became clear that we shared the same vision of how technology can improve local retail businesses. So today is a natural next step in our journey.
“By joining forces, we will be able to help people discover local stores and products on a much larger scale. We think this is the right way to accomplish what we set out to do – to bring the world’s retailers online and give them the tools they need to thrive.”
Bibby and Cummins raised €1.2m for Pointy in April 2015, with Frontline Ventures providing most of the cash. With the Frontline funding, Pointy got its manufacturing lined up and started the sales drive, firstly in Ireland and then in the UK and the US. The sales effort seems to have been outsourced, with only seven staff in engineering and operations on the books at the end of 2016.
Advised by KPMG, Pointy’s fundraising has been unusual. In 2016 and 2017, the company issued ‘SAFEs’ – Simple Agreement for Future Investment Instruments – to a plethora of investors, raising funding of $5.5m. Those investors, including rugby player Jamie Heaslip (in for $2,500) were sourced from Ireland, the UK, Australia and the US, as well as Estonia, Switzerland, Germany and the Virgin Islands.
In June 2017, these SAFE investors had their instruments converted into equity, in tandem with a $1.34m cash equity injection from seven investors, led by Draper Associates ($1m). The 2017 investors paid 160% more per share than some of the charter investors. The fan club included WordPress founder Matt Muillenweg, Google Maps creator Lars Rasmussen and Microsoft co-founder Paul Allen.
In 2018 Pointy closed a $12m fundraiser. Principal investors in the Series B funding round were Polaris Partners and Vulcan Capital. Polaris invested $6.3m at the time while Vulcan Capital, Paul Allen’s investment vehicle, invested $4.5m.
Pointy expanded its headcount from 12 to 33 people through 2018, according to filings. Operating company Pomo Search Ltd booked a net loss of €5.4m and the venture’s accumulated losses stood at €8.6m at year end. Deal value has not been disclosed by the vendors, with press speculation centring on a transaction value of $160m.
Photo: Pointy founders Mark Cummins (left) and Charles Bibby