Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Register today.

Swarm Mobile believes that brick and mortar retailers lack insights about how consumers are moving through physical stores.

According to a filing with the Securities and Exchanges Commission (SEC), the San Francisco-based startup has raised just under $3.5 million in its first round of funding to fix that problem. Swarm’s team, which is primarily composed of developers and former digital marketing execs, has developed technology to track customers in-store through their smartphones.

The goal is to put physical shops on a similar playing field as e-commerce stores, which already have a wealth of data about customer buying habits. According to the website, Swarm treats smartphones like “offline cookies,” so stores can personalize the experience for new and repeat shoppers. Swarm does this through its cloud-based platform that integrates into a store’s public Wi-Fi network.

Shoppers can freely use the Wi-Fi, while Swarm collects analytics about whether consumers are checking prices, researching different options, and more. That information is fed directly to the retailer via a data-rich dashboard. Retail customers can then send shoppers targeted coupons, emails, and promotional codes.

“Small and medium sized retailers have traditionally been at a disadvantage relative to big box retailers,” said Swarm’s cofounder and chief executive Rudd Davis. “Technology, however, is leveling the playing field.”

The funding round was led by Icon Ventures, with the firm’s partner Tom Peterson joining the company’s board.

The company is headquartered in San Francisco, but it has offices in New York, Australia, and Los Angeles. It raised a $1 million seed round in October of 2012 and has spent the previous year building relationships with Point of Sales (POS) providers.

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.