- Bakkt, which was established in 2018, got its start launching bitcoin futures and options at its parent company, Intercontinental Exchange.
- It’s now rolling out an app where customers can track all of their digital assets, from loyalty points to gift cards, in one place
- Bakkt’s app will allow users to exchange rewards and loyalty points for one another or for cash, bringing a new level of convertibility to the market
- Bakkt has already partnered with points programs at American Express, Chase, Chipotle, and JetBlue, among others.
- Visit Business Insider’s homepage for more stories.
If you’ve flown a plane, used a credit card, or rented a car, chances are you might have a stash of rewards points sitting in an online account. Many Americans do — by one estimate, there are more than 3.3 billion loyalty memberships in the US, according to Accenture — but points often aren’t exchangeable, can be difficult to keep track of, and their true value can sometimes be tough to calculate.
Bakkt, which is majority-owned by exchange operator Intercontinental Exchange, hopes to change all that. The startup, which launched in 2018 with a focus on the cryptocurrency markets, is in the process of rolling out a consumer-facing app that will allow users to easily get liquidity from a variety of loyalty programs, including those at Chase, JetBlue, and Chipotle.
In November, Bakkt first announced the rollout of the new app that brings together customers’ digital assets — including bitcoin, rewards points, and gift cards — in one place. Doing so enables users to exchange them for one another or cash, which offers a level of liquidity not seen in rewards programs.
The app is currently live with an early-access program for select users who signed up on a waiting list, and is expected to fully launch in late January.
Bakkt’s job “is to connect to all these different markets on behalf of the consumer,” Bakkt president Adam White told Business Insider.
Bakkt wants to enable users to become ‘asset agnostic’
Bakkt’s March acquisition of Bridge2 Solutions, a leading rewards and loyalty points provider, spurred development of the app. While the terms of the deal were not disclosed, ICE CEO and founder Jeff Sprecher said on the company’s first-quarter earnings call the exchange operator “spent nearly $300 million” to acquire Bridge2, according to a report from CoinDesk. That same month, Bakkt also raised a $300 million Series B round, led by parent ICE and Microsoft.
Bakkt estimates the digital assets market to be over $1.2 trillion, based on data encompassing loyalty programs, cryptocurrency markets, gift cards, and video game digital assets, among other categories.
It’s also not the only player eyeing the financials behind rewards programs. Wall Street has increasingly looked to loyalty programs as a way to help companies finance debt, especially those who faced economic difficulty during the financial crisis.
What Bakkt’s app brings together “is all these different siloed assets that each have market infrastructure to them, and in a way that becomes asset agnostic for our users, allowing them the ability to buy, sell, send, receive, and pay with any of these assets as if they were cash,” White told Business Insider.
Some of the assets in the Bakkt app, like bitcoin, are freely tradable on the open market and easily exchanged by Bakkt, said White.
For rewards points and gift cards, on the other hand, Bakkt serves as the intermediary between customers and the companies that issue the assets and determine their value, a function made possible by the Bridge2 purchase.
The company has partnered with leading brands that have rewards point programs
Currently, Bakkt’s points partners range from credit-card providers like American Express and Chase to restaurants like Chipotle and airlines like JetBlue. Other retailers, from Stop & Shop to Office Depot, are in the pipeline, the company said.
A critical part of Bakkt’s entry into the consumer market for digital assets has also been its partnership with Starbucks.
As of this March, Bakkt is now directly integrated into the payment section of the Starbucks app. When a user goes to buy something, they can pay for it by having Bakkt automatically convert crypto or points currently in their account to money that can be added to a user’s Starbucks account.
This kind of direct payment integration into third-party consumer apps will be a major focus of Bakkt’s business strategy as it develops the app.
Bakkt is “talking to merchants big and small,” said White.
“I think what’s unique about the Starbucks relationship is they’re the first of a number of partners that are going to work with Bakkt, because they recognize the value that we’re bringing,” he added.
Bakkt was formerly led by Georgia Sen. Kelly Loeffler
Bakkt’s former CEO, meanwhile, is currently embroiled in a Senate runoff race in Georgia. Sen. Kelly Loeffler was a longtime ICE executive and had served as Bakkt’s CEO upon its founding.
Loeffler, married to Sprecher, left Bakkt following her appointment to the Senate by Georgia Gov. Brian Kemp in December of 2019. Loeffler, a Republican, faces Democrat Raphael Warnock in a runoff election on January 5.
It’s unclear if Loeffler would return to helm the firm she once led should she lose in January. Loeffler came under attack in March after The Daily Beast reported that she and Sprecher sold a significant amount of stock in January, after a private Senate briefing she attended on the coronavirus.
For now, however, White and other Bakkt employees are solely concerned with building out the Bakkt app.
“Anytime we lose a key employee and they decide to leave Bakkt it’s not without a fond farewell, but that said, we’re really focused on launching the app and continue in the roll out of our early access program. And we’ve got every employee heads down focused on that,” White said.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
