Lin Dai
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Tap Network raises $4M for its customizable rewards program
Tap Network is providing a new approach to loyalty rewards programs that it describes as “rewards as a service.”
You may recognize the Tap Network name, as well as its co-founder and CEO Lin Dai, from Hooch, a startup that offered a drink-a-day subscription service before shifting focus to a broader rewards program. Dai told me he “learned a lot from the Hooch experience” but ultimately “decided that Tap is a much bigger opportunity, we’re really looking at rewards in general.”
So Tap Network is a new startup, one that recently raised $4 million in funding from investors including Revelis Capital, Nima Capital, the Forbes family office, Warner Music Group, Access Industries, Bill Tai, Bob Hurst, Edward Devlin and others.
Dai said that normal rewards programs are only accessible to the top 10% or 20% of a company’s customers. So in his view, businesses have an opportunity to “super serve the average customers who 40 years ago might not have been considered important customers, but who today could be building a loyalty behavior pattern.”
Image Credits: Tap Network
He added that making rewards programs accessible to more customers has an added benefit for many businesses, because “whether it’s a major bank or major travel company, they are starting to accrue billions of dollars that are locked up in these wallets.” Those points might never be redeemed, but they’re still considered liabilities from an accounting perspective.
Tap Network aims to solve this problem by allowing customers to spend those points through a broader network of rewards, which can usually be redeemed at a lower point level. It’s offered as a white-label addition to an existing rewards program, with each program choosing the rewards that might be the best fit for their customers.
For example, Uber recently worked with Tap Network to expand its Uber Rewards program, offering new Tap Network-powered rewards like free Apple Music or HBO Max, as well as the option to donate to causes like World Central Kitchen. And the minimum number of points needed to claim a reward fell from 500 points to 100 points.
Other companies using Tap Network include Warner Music Group (which, as previously mentioned, is also an investor) and privacy-focused browser company Brave.
Dai said that in the future, Tap could even allow consumers to combine rewards points from different programs: “If I want to redeem something, I might be able to take a little bit of my Uber points, a little bit of my Warner points, a little bit of points from another program,” and combine them.
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Hooch moves beyond subscription drinks, with rewards for travel, dining and more
When we first wrote about Hooch, it offered a fun, straightforward deal — for $9.99 per month, you could claim one free drink per day from participating bars and restaurants.
Since then, the company launched Hooch Black, a pricier subscription that includes perks like hotel discounts and concierge service. But even then, co-founder and CEO Lin Dai was hinting at plans to use blockchain technology to create what he called “a decentralized model for consumer rewards.”
Now Hooch is delivering on what Dai promised, with a relaunched app that rewards users for their purchases.
“We were super excited about the feedback and response [to Hooch Black] that we saw from our members,” Dai said. “What we decided to do is just completely update the app with rewards for consumers across four different categories — travel, dining, entertainment and e-commerce.”
He noted that while most loyalty programs reward you for using a specific card or for shopping with a specific company, Hooch has partnered with more than 250,000 merchants (including Marriott hotels, TAO restaurants, Starbucks, Uber and Amazon). The company can actually scan the purchases made on any linked debit or credit card, and you’ll be rewarded whenever you spend money with those partners.
The rewards take the form of what Hooch is calling TAP rewards dollars — the exact reward will vary depending on the merchant, but the company says it could be as high as 10 percent of your spending.
Lin Dai, CEO of Hooch
Dai said TAP dollars are actually a stablecoin pegged to the U.S. dollar, but he emphasized that you don’t need to understand the backend to use the rewards. For most users, TAP dollars will simply be a digital currency they can redeem for hotel bookings, restaurants credits and gift cards.
“Security is our top concern,” Dai added. The idea is to access your transaction history to verify your purchases (Hooch makes money by driving purchases for merchants), but without storing or sharing identifying information. “When we capture the consumer purchase information, we actually don’t capture any of their names or credit card numbers … We don’t store any identity.”
The program also comes with a big perk for enlisting your friends. There is an upfront reward of five TAP dollars, but the real selling point is the fact that you’ll get 20 percent of their rewards — not just on their initial purchases, but for the entire time they use the app.
If you like the Hooch Black plan, you’ll still be able to sign up and pay for it. But the company’s emphasis has shifted to the broader rewards program, which you can join for free.
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