A German startup promoting local businesses through a comprehensive regional gift card platform plans to expand into Luxembourg by 2024.
Founded in Saarland in 2019 by serial tech entrepreneur Andreas Maurer, Keep Local was created to tackle the monopolies of big name brands and their gift cards.
“A few days before Christmas 2018, my co-founder Heidi, who had five fashion stores in our region, went to the drugstore and saw a huge queue of people in front of her buying these gift cards for things like Amazon, Echo and Xbox,” Maurer explained. The business woman considered how she could make her store cards more attractive and the seed of an idea formed: gift cards that could be used in hundreds of regional stores.
Maurer and his team built an API using blockchain technology, which is fully integrated into partner cash desk processes.
One of the top startups in Saarland, today Keep Local’s Saarland cards are now accepted by 800 partners and the number is rapidly growing. In June, it added the Globus supermarket chain to its list of partners, giving card users access to its 60 stores. “They are now our first big partner,” Maurer said.
In the same month, Keep Local began a partnership with global payment and collection services firm ePay, which has some 230,000 gift card displays in the Dach region. “And if this works, we are now piloting with Rewe and Kaufland, big partners, and they are the additional base to scale fast,” said Maurer.
Exploring Opportunities
Meanwhile, doors are opening in other areas, notably via software manufacturers who implement Keep Local’s API into their products. Yet another revenue stream Keep Local is exploring is the tax-free earnings that employers give to staff. These monthly giftcards of around €50 are limited for use in the region they were issued to support local economies. This alone provides a six-figure monthly recurring revenue for the firm, says Maurer.
Maurer says that what sets his company apart from other gift card providers is the fact that Keep Local makes everything for its partners: clearning, partner onboarding, support etc. And since March, it offers a fee-free version for partnerships. In future, the firm will generate revenues from unspent cards when they expire. “Since we launched this new model, 100% of partners took the free model,” says Maurer.
German law prevents Keep Local from issuing national gift cards, as it would be considered emoney. “Then you have to become a bank,” sighs Maurer. And so he and his team are targeting the country, one region at a time with the goal of attracting 200,000 partners. They are currently in the process of raising €5m to further the firm’s expansion, notably by targeting more software partners.
Regional Finals For Startup World Cup
Keep Local, which was a finalist for the regional Startup World Cup, also has its sights set on Luxembourg. “I learned so much from the startup world cup and I’m so thankful for this…I’ve learned in the last two weeks that Luxembourg has a super cool startup ecosystem. And that’s really impressive,” the entrepreneur said.
The firm plans to open a Luxembourg office for onboarding partners in 2024. “It doesn’t mean that we will bring the product the moment we open the office. We will do that when we have enough partners,” Maurer said. And there has been interest from potential partners in Vienna.
“As a startup, we have so much to do. Building a whole new company, it’s just a hard job,” says Maurer, recognising the size of the market and the time and abilities of his 18-strong team.
