Punchh, a mobile solutions provider for the restaurant industry, said it has raised $3 million in venture capital funding to fuel its ongoing expansion. Punchh is a one-stop shop mobile solution for restaurants that delivers branded mobile apps for games, gift cards, loyalty, online ordering, payments, referrals, surveys, and marketing campaigns, according to a news release.

The company seeks to drive word-of-mouth interaction between customers through restaurant reviews, measurable referrals and social interaction campaigns, the release said, and its solution gathers and manages 360-degree insights on customer purchasing habits and social network activity by integrating with restaurant point-of-sale systems and Facebook.

The company's technology operates in more than 1,000 restaurant locations under brands such as Church's Chicken, Earl of Sandwich, Hungry Howie's, Mama Fu's, Max's Restaurant, Pacific Catch, Rita's Italian Ice, Vino Volo, and Voodoo BBQ & Grill, the release said.

The latest round of funding brings the company's total to $4 million. It has received backing from Cervin Ventures, Green Span Ventures, VKRM, Sandhill Group, Garnett Ventures and multiple other leading Silicon Valley angel investors, according to the release.

"By building the first mobile solution for the restaurant industry, Punchh's cutting-edge technology has made it the segment leader," founder and CEO Jitendra Gupta said in the release. "This round of funding will fuel our already solid momentum and allow us to tap deep expertise and guidance from our investors and advisory board. We will aggressively scale our sales, product and customer success organizations to meet the exploding demand in the restaurant marketplace."

By replacing cumbersome, easy-to-lose paper punch cards and magnetic stripe loyalty cards, Punchh said, operators using its technology have realized five- to six-fold customer participation rates, three to four times greater repeat purchase rates and tenfold increases in customer reviews over Yelp!. Punchh users also report same-store sales increases of 7 to 10 percent, the company said.

"We know our customers are more mobile and social than ever before," Steve Heeley, president and CEO, Earl of Sandwich, said in the release. "So we want to transform our customers into ambassadors who spread the word about our brand and refer friends to our stores. Punchh allows us to achieve that by engaging them right on their mobile devices and rewarding them for their loyalty and referrals."

Preetish Nijhawan, managing director at Cervin Ventures, which led the funding, said Punchh's mastery of these emerging trends and solid marketplace position led his group to invest in the young firm.

"Punchh is addressing a huge market and a key problem that most restaurants are struggling with: how to engage mobile customers, drive brand awareness and growth using customers' real-life social networks," Nijhawan said in the release. "Today when you go to a restaurant, the operator doesn't know who you are and how to engage you and leverage your influence within your social group. Punchh solves that for a restaurant and engages customers in a way that is differentiated. This market solution requires a unique combination of enterprise software expertise and consumer application knowledge. We like to invest in the best platforms in a space, and we are excited to work with Punchh to help them grow."

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