Cambridge start-up Leaf recently announced a partnership and $20 million in funding from Heartland Payment Systems, which its co-founder said will yield exciting things as the company competes in the mobile POS systems market.
The tech company is the creator of the LeafPresenter, a tablet designed for the e-commerce needs of small businesses. Leaf users can manage their business transactions through the Leaf platform, including tracking orders, processing payments and managing online product catalogues, as well as business analytics such as sales data.
Their budding partnership with the Heartland Payment Systems is set to yield exciting developments, said Leaf co-founder and COO Sebastian Castro.
“We’ve been a very local Boston start-up and we’re really starting to grow. This partnership will certainly give us wings,” said Castro. “I think what’s most exciting is that you’ll continue to see really exciting product innovations.”
Castro and co-founder Aron Schwarzkopf founded the company in 2011, eventually hiring former MasterCard and American Express executive Robert Wesley as their chief strategy officer and IBM programmer and software developer Mary Sirkin as their chief technology officer. Seed funding of a million dollars helped them launch their prototype with a dozen Boston businesses in 2012, according to TechCrunch.
The company, which will celebrate its third birthday in January, is unique in its specifically designed operating system, which allows it to include additional, complimentary apps for business owners and operators.
“The app store is definitely the key to Leaf’s strategy going forward,” said Castro. “With all of the apps, it’s really only limited to the company’s imagination.”
With this new venture, Heartland will bump up Leaf distribution using its full sales engine of 800 relationship managers, and will develop new apps for the Leaf platform, including payroll and customer loyalty applications.
A Heartland spokesperson said the company evaluated many different service providers before their decision.
“We were searching for a partner with an innovative and stable platform as well as a shared philosophy of empowering business owners to work with the payments and solution providers that they deem best for their individual businesses – and we found both in Leaf,” said Heartland Chairman and EDO Bob Carr in a statement.
Leaf, which has users in over 60 cities across the U.S., is one of several companies that are offering mobile POS systems to small businesses such as food trucks, restaurants, convenient stores, gifts shops, and boutiques, among others.
Both Groupon and Paypal announced iPad and iPhone app-based POS systems and accessories in May. They join one of the market leaders, Square, which tripled its user base and was integrated into
7,000-plus Starbucks locations in 2012, according to CNET.
The cost and design of the tablet sets them apart from competitors, said Castro. “We thought we could give merchants something better that was more robust and less expensive,” he said.
At $250 for the tablet, plus $50 per month to use the Leaf operating system, the system costs less than its smartphone and iPad equivalents.
Square, Paypal and Groupon’s POS system Breadcrumb each typically charge a small fee for each credit or debit card swiped, ranging from 1.8 percent to 3.9 percent. The companies all operate on Apple products, which are generally not included.
However, accessories which turn iPads into fixed POS stations, range from hundreds to thousands of dollars – Square Stand costs $299 for Square Stand, while Breadbox PRO’s package rings in at $545 (iPad 2 included, cash drawer, stand, card reader and receipt printer included).
As of yet, Leaf doesn’t offer its own accessories, but the tablet is built to work with any device on the market.
In the meantime, Castro told Banker & Tradesman that a new Leaf app store and a new product for restaurants are in the works. Both are expected to be released by the end of the year.
