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Quirky loyalty startup Belly has raised $12 million in the first tranche of its second round of funding.

Belly powers a rewards platform for small businesses and a universal loyalty card for consumers — an increasingly popular area for startups to focus on. Shoppers keep Belly cards on their smartphones and scan for points at participating locations. Belly sets up iPad kiosks for its merchants to manage rewards. The company works with 6,000 local merchants around the country.

It distinguishes itself from all the other digital loyalty programs by getting to know its partner merchants and customizing rewards accordingly — every business has a different array of options.

This approach requires a lot of legwork, but CEO Logan LaHive told VentureBeat that it creates a deeper connection between merchants and customers and can increase the frequency of customer visits by an average of 20 percent.

For example, at a Chicago comic store, Belly customers who make 50 purchases can punch the owner in the gut, if they so desire. More conventional rewards include one dozen cupcakes for frequent visitors to Mission Minis, or free tee-shirts to patrons of Palo Alto’s ground up.

Belly recently added a function that helps businesses find loyal customers through Yelp reviews and Facebook likes and target them with rewards. Its new “bites” feature sends free samples to prospective new customers to try and lure them in. All of this data is tracked and analyzed so businesses can see how well their efforts fare.

The startup got its start in Chicago but has rapidly expanded nationwide, with a strong presence in the San Francisco Bay Area, New York, Philadelphia, Los Angeles, and Austin. As the platform became more sophisticated, Belly began looking at potential enterprise clients and is now working with 50 national chains representing 700 locations, including 7-11.  It is integrated with Google Wallet, Samsung Wallet, and Apple Passbook.

The investors are an impressive list, including New Enterprise Associates, Andreessen Horowitz, DAG Ventures, Lightbank, Cisco Systems, and 7-11’s venture arm, 7-Ventures. (Disclosure: Lightbank is also an investor in VentureBeat.)

This round brings Belly’s total capital raised to $28 million. It will support hiring to meet existing customer demand and scale the platform.

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