The first time The Ken meets the founder and former CEO of Loylty Rewardz, Bijaei Jayaraj, it’s at a popular coffee shop in Powai, a suburb in Mumbai once known for being home to the city’s startup ecosystem. He wells up when he recounts what happened in January.
“They popped champagne, and my son sat there and looked at everything,” says the 44-year-old. Jayaraj says he hopes his son saw why his father had been missing from the first 10 years of his life. There is a pause. And for the first time in a long time, Jayaraj, who usually loves to talk, is quiet.
Not coming in the limelight
Odds are you don’t know Jayaraj. He is barely ever featured in business dailies. He isn’t on Twitter spouting vague motivational quotes. He doesn’t attend startup conferences. Jayaraj disappears in a crowd. But he carries the distinction of being the founder of Loylty Rewardz, a business-to-business startup he founded in 2007.
The company raised about Rs 160 crore (less than $20 million over the years), broke even, became the biggest player in the loyalty space, sold for Rs 300 crore ($44 million) to payments company BillDesk, and helped its investors make a complete exit. All in just seven years. And in January 2018, after spending three years at the company post the acquisition by BillDesk, its CEO rode into the sunset.
But there are few, if any, stories about the man who did it all. Fewer still on loyalty as a sector. In India, loyalty is run primarily by banks and big retailers. Startups trying to crack that sector remain few and far between, which makes this company important.
And the fact that Jayaraj saw patterns no one else could make it all the more fascinating. Loylty Rewardz did what it did in an unsexy sector, where nuts and bolts are fairly complex to imagine, and it managed to crack it while fighting companies with far more money. In addition to this, Loylty Rewardz did it all and made profits.
Handling the loyalty programs
But what does Loylty Rewardz do? Simply put, it handles the loyalty programs of almost every national bank, taking on the liability of loyalty points and helping customers redeem them at the end of the cycle.
Every time you use your debit or credit card at a store or on a website, the bank gives you points. These points are redeemable within three years. You can purchase air miles, buy a phone, or even an AC if you have collected enough points. Loylty Rewardz keeps track of these points and helps you redeem them. If you want to buy a phone with the points you’ve accumulated, Loylty Rewardz will find you a merchant. You spend those points and start back at zero.
Behind the scenes, for every point that you earn, the bank pays Loylty Rewardz. The more you spend (because you know at the end of it, you can burn it all to get something for free), the more the company makes. And if you, like a lot of people in India, don’t redeem your points, well, it means Loyalty Rewardz didn’t have to spend money buying you that phone.
It is not exciting, and it requires a lot of operational knowledge. But that’s okay because that’s Jayaraj’s strong suit. That and having the gift of the gab.
Jayaraj started his career at Jet Airways in 2006. He was recruited straight out of business school and found himself on the bench.
“I would go up to my manager at Jet and tell him, ‘Hi, I played video games at work for eight hours today’,” says Jayaraj. The manager would frown, shake his head and send Jayaraj away. He did it every day for a week.
Finally, his manager moved Jayaraj to one of Jet’s forgotten departments, Privilege. It was Jet Airways’ loyalty program. It gave fliers miles for every flight taken, encouraging customers to fly often because it meant a free flight in the future. The department was in the process of trying to tie up with banks but didn’t have a sales pitch.