QR code technology, which exploded during the pandemic as businesses sought hygienic alternatives to physical touch points, continues to grow in popularity, particularly in sectors such as restaurants and in-store retail. According to Insider Intelligence, more than 99.5 million smartphone users will scan a QR code by 2025, up from 83.4 million in 2022. There is a potential downside — some argue that QR codes reduce the need to hire employees to collect payments and provide customer service — but it seems clear that the technology, for better or for worse, isn’t going anywhere.
That has benefited startups like Beaconstac, which works with companies including United Airlines, Amazon and Deloitte to create QR code experiences for end customers. In a sign of how rosy business has been, Beaconstac announced today that it has closed a $25 million Series A funding round led by Telescope Partners with participation from Accel.
Co-founder and CEO Sharat Potharaju says the new capital will be invested in expanding the startup’s team and product research and development.
“We’ve seen tremendous growth since the start of the pandemic because our QR code technology offers businesses an efficient solution for creating contactless, user-friendly experiences,” Potharaju told TechCrunch in an email interview. “We’re seeing more and more businesses continue to adopt this technology because it simplifies the customer experience.” The pandemic has only intensified the existing need for a better connection between the physical and digital worlds.
Potharaju co-founded Beaconstac in 2019 along with Ravi Maddimsetti. Potharaju is an investment banker by profession, having held positions at Merrill Lynch and Fieldstone Private Capital Group. Maddimsetti, a software engineer, was an IT associate at Morgan Stanley and contributed to open source Linux projects, including the GNOME desktop environment.
With Beaconstac, Potharaju and Maddimsetti sought to ride the wave of QR code adoption, building a platform that enables businesses to create, manage and track QR codes across various physical touch points. Using Beaconstac, companies can modify aspects of branded QR codes, including shape, captions and background colors, to match their design languages.
Beaconstac also allows companies to create QR codes that track engagement, such as a customer’s location at the time of a scan. While not a feature likely to appeal to every patron, Potharaju claims it helps companies obtain first-party data at a time when multiple platforms (see Apple) are becoming averse to tracking. (Whether you agree with Potharaju depends on which side of the privacy debate you fall on, of course.)
“Beaconstac’s platform does not collect any personal information when a QR code is scanned – we are compliant with GDPR security and privacy regulations,” said Potharaju. “Consumers can always request data deletion under GDPR rules.
While Beaconstac competes with providers including Flowcode and Bit.li, the company claims to have over 20,000 customers – double the number of customers last year. Potharaju declined to share revenue figures, but said Beaconstac — which has offices in the U.S. and India — plans to double its 75-person workforce sometime this year.
“In 2019, my co-founder and I asked the question, ‘Our phones are great at connecting us online, but why aren’t they better at connecting us to the physical world?'” Potharaju said. “Beaconstac [is] it helps companies… build digital cohorts based on interactions in the physical world.”