Loyalty tech startup acquired in mega eight figure deal
UK-based loyalty tech startup Lux Rewards has been acquired by global rewards company Enigmatic Smile in an eight-figure deal following years of near closures.
The exact purchase price has not been disclosed.
The acquisition reflects growing consolidation in the loyalty tech industry as businesses compete to meet increasing consumer demand for rewards and retention-focused programs.
Lux Rewards had a slow start, struggling to scale despite early backing from the Just Eat accelerator, before nearly shutting down twice around the pandemic.
The firm shifted its business model, pivoting from a direct customer approach to focusing on enterprise partnerships.
It integrated its rewards programs within banks, airlines, and employee benefit platforms, leveraging their existing customer bases. This allowed it to secure a partnership with Barclaycard in 2021.
Similar deals with British Airways and Mastercard followed.
In that time, the firm scaled to 105m cardholders, achieving a fourfold year on year revenue growth by 2024.
Bish Shmeir, chief executive of Enigmatic Smile said: “Their growth speaks for itself, and their leadership team has built something extraordinary. Together, we’re creating a global loyalty powerhouse”.
Loyalty tech industry growth
This acquisition comes as the loyalty tech industry continues to expand.
According to data platform Statista, the market is projected to surpass $41bn (£32.35bn) by 2032 as businesses invest in customer retention.
Zinrelo also reported that 75 per cent of consumers now prefer brands offering loyalty programs, making them a key driver of purchasing behaviour.
This is driven by the rise of neobanks and challenger banks, meaning that consumers now carry more cards than ever in their digital wallets.
Meanwhile, gamification is reshaping the sector, with over 45 per cent of consumers stating that engagement-driven rewards influence their choices.