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PerkStreet Financial, promoting debit cards with cash-back rewards, adds $9 million to its coffers

Posted by Scott Kirsner May 11, 2011 09:20 AM

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By Scott Kirsner, Globe Columnist

Boston-based PerkStreet Financial, which offers a debit card that pays customers two percent cash back on their purchases, is pocketing a little cash of its own: $9 million in new funding from two local firms, Globespan Capital Partners and Highland Capital Partners. (I last wrote about PerkStreet in March.)

Globespan partner Andy Goldfarb is joining PerkStreet's board. "Debit cards are riding a major wave of consumer demand," especially as Americans seek to shed the credit card debt they accumulated in boom times, Goldfarb says. "PerkStreet is capitalizing on that trend."

The company has now raised just over $15 million. PerkStreet CEO Dan O'Malley writes via e-mail that the new funding will be used for "two main purposes: building additional products and technology that allow customers to save even more cash, and expanding the channels we use to market our products." Additional products could include a PerkStreet mobile app and a savings account (PerkStreet currently offers only a checking account.)

PerkStreet gives its customers even more than two percent back on purchases they make with select merchants each month (this month, for instance, customers get five percent back on anything they spend with Groupon, Living Social, or Zulily). PerkStreet says it is now returning about $1 million a year in cash-back rewards to customers.

About 12 people work for PerkStreet in Boston, and another 13 work on the PerkStreet offering at the company's banking partner in Delaware, Bancorp Bank. He expects headcount to grow by about 20 percent over the rest of the year.

tags Andy Goldfarb, banking, Dan O'Malley, financial services, GlobeSpan Capital, Highland Capital Partners, PerkStreet
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About Scott Kirsner 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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