Updated: Loyalty Lab raises $7M for online retail customer management

Updated with response from Canaan Partners:

Loyalty Lab, a San Francisco company that provides software to online retailers to help them manage customers and nurture loyalty, said it has raised $7 million in venture capital.

OpenView Venture Partners, of Boston, led the funding.

Its customers include New York & Co., Brookstone, 1-800-Flowers.com and Bally Total Fitness.

In one notable development, the company’s earlier investors, Canaan Partners, Mobius Venture Capital and Outlook Ventures, did not participate in this round. Mobius is known to be shutting down, so that is no surprise.

However, it does raise questions about Canaan and Outlook. Deepak Kamra, a general partner with the firm, told VentureWire (sub required) the size of this latest round was “so prohibitively large the firm was not interested in maintaining its share of ownership.” However, $7 million is not that large, considering Canaan would be sharing it. We’re checking in with Kamra, and with Outlook, to get more information.

[Update. Here's how Kamra responds: "It appears VentureWire misinterpreted my responses. Clearly $7M is not too prohibitively large a piece for us to take a share. However, since Canaan had only a small ownership position, I am no longer on the board of Loyalty Lab, and OpenView wanted a large ownership position, we decided not to participate on this round. We still like the company, but we try to focus on companies where we can have a meaningful impact as active investors."]

According to VentureWire, Chief Executive Mark Goldstein bought out the shares that had belonged to Mobius and Outlook, which no longer own stakes in the business.

(Story originally published July 2)

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Tags: deal