MaxRewards Secures $3M to Optimize Payment Rewards

The Genesis of MaxRewards: Optimizing Credit Card Benefits

Upon completing his college education, Anik Khan’s initial professional experience involved work with credit cards and corporate spending at Accenture. He quickly observed that strategic utilization of credit card rewards programs and promotions could generate substantial financial gains – potentially several thousand dollars for individuals.

This realization, dating back to 2017, spurred Khan and David Gao to conceptualize MaxRewards. The company’s core offering is a digital wallet application designed to streamline credit card management and automatically activate valuable benefits. These include rewards points, cashback incentives, and monthly statement credits.

Securing Seed Funding for Expansion

Targeting the significant portion of the American population – approximately 83% – who possess credit cards, MaxRewards officially launched its app in 2019. The Atlanta-based company has now announced the successful completion of a $3 million seed funding round. This round was co-led by Dundee Venture Capital and Calano Ventures.

Additional investors include Techstars, Fintech Ventures Fund, Service Provider Capital, and Nick Izquierdo, president of Fleetcor.

Prior to developing MaxRewards, Khan personally tracked his credit card benefits manually. He recalls accumulating $16,000 in rewards within a single year. However, he also noted that maximizing these benefits proved to be a time-intensive and often challenging process.

Addressing the Challenges of Rewards Utilization

Credit card companies don’t consistently highlight available rewards and savings opportunities, creating a barrier for consumers. “Other companies have attempted similar solutions, but a key obstacle is the lack of comprehensive reward information and current offers,” Khan explained to TechCrunch.

Even with aggregated data, users typically need to manually activate benefits before they expire, adding to the complexity.

The MaxRewards app functions by allowing users to connect their credit card accounts. When a purchase is made, the user’s location is compared against merchant data. An algorithm then identifies the card that will provide the optimal reward for that specific transaction.

The average MaxRewards user manages a portfolio of six different credit cards.

A Freemium Model for Broad Accessibility

MaxRewards is available for free download and offers a range of complimentary features. Users seeking enhanced functionalities, such as automated benefit activation and maximized rewards, can subscribe to MaxRewards Gold.

This premium tier allows users to customize their monthly subscription price, typically averaging over $25, based on their anticipated value derived from the service.

Ron Watson, a partner at Dundee, highlighted his firm’s investment focus on early-stage companies located between the coasts, with a particular interest in consumer and e-commerce businesses.

The Value Proposition: Automation and Savings

Watson expressed his admiration for MaxRewards’ accomplishments with a small team of just three individuals. He also identified with the company’s mission, drawing on his personal experience of growing up in a family with limited financial resources for travel.

He recounted how, upon securing his first job and frequent travel opportunities, he accumulated substantial rewards that enabled him to afford a vacation to Hawaii with minimal out-of-pocket expenses.

“Initially, I tracked my points using a spreadsheet, but as my family grew, I realized the difficulty for the average person and the importance of automation,” Watson stated. “I tested the app and saved $20 on my first day.”

Differentiating MaxRewards from Competitors

While comparisons are often drawn to platforms like NerdWallet or Mint, Khan asserts that MaxRewards distinguishes itself through its proprietary credit card system connectors. Instead of relying on third-party data aggregators, MaxRewards directly integrates with card systems to access reward information.

With hundreds of thousands of offers available, and increasing consumer demand for additional features, Khan determined that securing seed funding was a necessary step.

Having previously raised a smaller seed round of approximately $200,000 during his time at Techstars, the new funding will facilitate team expansion – from the current three members to an anticipated 20 by year-end – and accelerate user acquisition, product development, and compliance efforts.

Future Development and Expansion

The company’s future plans include automating rewards and savings across a broader range of platforms, including debit cards, payment applications, and cashback programs. Development of browser extensions and a web application are also planned.

Khan also intends to prioritize educational resources to promote responsible and strategic credit card usage.

Arron Solano, managing partner at Calano, first encountered Khan through Techstars and recognized his strong advocacy for the intelligent use of credit cards. His firm actively sought an investment opportunity in a company like MaxRewards.

“During our initial conversation, I immediately informed my partner that Anik demonstrated a deep understanding of the subject matter, particularly for a company at such an early stage,” Solano added. “His strong team, aligned vision, and ability to identify a market with highly engaged ‘super users’ were all compelling factors.”