Google purchases startup by Poly grads

Company develops programs for customer loyalty cards

jhickey@thetribunenews.comJuly 14, 2011 

A fledgling Cal Poly startup company called Punchd has been sold to tech giant Google.

Punchd was founded in 2010 by Cal Poly computer science students Reed Morse and Grantland Chew as part of an Android development class and senior project.

Morse called Google an engineer’s paradise. “A lot of our heroes work here. Now we’re working beside them.”

Morse and Google would not confirm a purchase price, but according to website techcrunch.com, two unnamed sources pegged the acquisition price between a low seven figures and $10 million.

Punchd brings customer loyalty cards, such as the commonly used Buy 10 Get One Free punch cards at coffee shops, to mobile platforms such as smartphones.

Its first customers were Cal Poly campus shops such as Jamba Juice and Peet’s Coffee, followed by SLO Donut Co. on Foothill Avenue. At the time of acquisition, Punchd had about 100 clients in San Luis Obispo, the Bay Area and in Missouri, Morse said.

Google was not the first company to approach Punchd with an interest to buy. However, mentor David Janzen, the Cal Poly associate professor of computer science who taught the Android development class, encouraged Morse to stick with his own startup — even if it meant sleeping on friends’ couches in the Bay Area. After graduation, Chew went on to work at another startup, while Morse and another Cal Poly graduate, Xander Pollock, landed on the couch at Morse’s grandparent’s home in Palo Alto.

In February, Punchd earned $50,000 in funding from 500 Startups, a firm that provides early-stage companies with funding via seed investments. Then Punchd grew to six employees, of which five are Cal Poly graduates. And soon after, through 500 Startups, they were able to pitch their product to several investors, including Google.

“It’s one thing to have a great idea. It’s another thing to implement it and perform,” Janzen said.

Punchd team members will now become Google employees at the Mountain View “Googleplex,” where they will continue developing Punchd full time.

Punchd will likely become part of the new Google Wallet system, which will turn phones into virtual wallets with stored payment cards, receipts and customer loyalty rewards.

“We’re happy to welcome the Punchd team to Google. They’ve built a cool and efficient way for customers to engage with local businesses, and we think they’ll be a great fit for our mobile and local teams,” Google said in a statement.

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