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iPhone app-maker CardStar shops for office space in Boston

Posted by Scott Kirsner  July 1, 2010 01:42 PM

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cardstar.jpgScouting the Boston area for office space this week is CardStar Inc. The start-up makes a popular, free iPhone app (1.5 million downloads so far) that enables you to digitize all of your loyalty cards and then simply show the bar code on your iPhone's screen when you're at the checkout counter. The company has previously operated virtually, with employees in Massachusetts, Connecticut, and Washington, D.C. Bizdev chief Stuart Hilger says there will be three employees in the new Boston office, and CEO Andy Miller will work from it part-time.

I've tried the app three times now. It didn't work at my local Shaw's grocery or at PetSmart, but on the third try, at a CVS Pharmacy, it finally generated that sought-after beep from the laser scanner. (My hope was to be able to get rid of all those loyalty cards hanging off my keychain or stuffed into my wallet; for now, I'm holding on to them) On Apple's iTunes Store, CardStar currently has a 2.5 star rating, out of a possible five stars.

Hilger explains that the on-screen barcodes work well with some stores' scanning equipment, and not with others. "It's totally a binary thing," he says. "If it works the first time, you'll keep using it, and if it doesn't, you'll probably never use it again." Shoppers at City Sports tend to have good luck, but not Sears. At places like Staples and K-Mart, you may find one store where the app works, but others where it doesn't due to different scanning gear.

The company hopes to sell sponsorships in the app (Chase Manhattan Bank ran one recently), license its barcode-rendering technology to others, and also make it convenient to save and redeem coupons using the CardStar app. Hilger explains that CardStar can earn a few pennies for each coupon a user cashes in.

CardStar raised a first round of funding earlier this year: $1 million, some of it from Cambridge-based LaunchCapital. Hilger says the company may wind up adding a bit to that round, given that some strategic partners have expressed interest in putting more money into CardStar.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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