Drop
4 known investors
Toronto-based mobile rewards company whose free app pays users cash-back points on purchases with partner merchants.
Also known as Drop
Investors · 4
Also in the syndicate · 3
Company profile
researched Aug 2026Drop operates a mobile rewards platform aimed at millennial shoppers. Users install a free app, link their spending, and earn points that convert into cash rewards on purchases made with partner brands; points are redeemable for gift cards at various retailers. The company positions the product as a mobile-first alternative to legacy loyalty programs that rely on physical cards swiped at the point of sale and cumbersome redemption processes.
On the merchant side, Drop connects partner brands with shoppers who have demonstrated interest in a category or brand, and supplies analytics intended to help retailers understand customers and competitors and improve the effectiveness of marketing spend by acquiring, nurturing and rewarding hard-to-reach customers. Management frames the longer-term goal as using payment and financial data to inform consumer experiences and retailer decision-making, and to offer marketers a channel measured on proven sales rather than clicks or impressions.
Founding story
Derrick Fung launched Drop in 2016 with $1 million in initial capital, building the service as a mobile-first rewards program rather than a card-based loyalty scheme. New York-based White Star Capital backed the company from its 2016 launch.
Business model
Drop provides a free consumer app that rewards purchases with points redeemable for gift cards, and monetizes through merchant partners who use the platform as a performance marketing and customer acquisition channel, paying for demonstrated sales rather than clicks or impressions.
Revenue is derived from merchant partners that use Drop to acquire and reward shoppers and to measure marketing effectiveness against actual sales driven through the platform.
Traction
As of the February 2019 Series B, Drop reported more than 3 million users across Canada and the United States, over 300 merchant partners, more than $350 million in sales driven for merchant partners, and nearly $19 million in rewards earned by users. The team numbered 65 employees.
Latest developments
Following the Series B, Drop said it would allocate funding to growth, expansion of the platform's machine learning capabilities, entry into the UK and Australian markets, and hiring across its Toronto and New York offices. The CEO indicated a public listing could be a future possibility without providing specifics.
▸Full profile — market position, technology, go-to-market, geography, history
Market position
Drop competes with established loyalty programs such as Air Miles, Aeroplan and Scene, differentiating on a card-free mobile experience. Management cited an expected $200 billion global loyalty industry by 2022.
The company contrasts its mobile-only approach with incumbent card-based loyalty programs, emphasizing no physical cards, brands selected for a millennial audience, and machine-learning personalization of offers.
Technology
The platform applies machine learning and predictive analytics to payment data in order to personalize offers for individual users and to improve merchant targeting. Technology from acquired startup Canopy Labs, which used predictive analytics for customer profiling, was incorporated into both the consumer and merchant sides of the product.
Go-to-market
Consumer acquisition runs through a free mobile app distributed directly to shoppers, while merchant relationships are built through partnerships with consumer brands including Postmates, Expedia and Glossier.
On the consumer side, mobile-first millennial shoppers in Canada and the United States; on the commercial side, consumer brands and retailers, with a stated focus on millennial-oriented brands alongside some big-box partners.
Geography
Headquartered in Toronto with an additional office in New York, serving users in Canada and the United States, with stated plans to expand into Australia and the United Kingdom.
History
Founded in 2016, Drop raised a $5.5 million seed round announced in October 2017 and a $25.8 million CAD Series A less than four months later. In November 2018 it acquired Canopy Labs, a Toronto-based, Y Combinator-backed predictive analytics startup, and subsequently integrated much of that technology into the Drop app. In February 2019 the company closed a $58 million CAD (about $44 million USD) Series B, bringing total funding to $94.5 million CAD.
Compiled by commissioned research from 8 cited public sources — announcements, filings, and press listed under research sources below.
Key figures
latest reportedCompany-reported or press-reported figures, each dated to when it was claimed — not independently audited.
Timeline · 3
launches, deals, and filingsDrop stated it would use part of its Series B to expand beyond Canada and the United States into Australia and the United Kingdom, and to grow its Toronto and New York teams.
Series B led by returning investor HOF Capital with participation from NEA, Sierra Ventures, White Star Capital and, for the first time, Royal Bank of Canada as a strategic investor; brings total funding to $94.5 million CAD.
$44M source ↗
Drop acquired Toronto-based, Y Combinator-backed predictive analytics startup Canopy Labs, whose technology was integrated into the Drop app for personalization and merchant targeting.
Dated company events from announcements, filings, and press; legal rows summarize public dockets and regulator releases.
▸Research sources · 8
primary sources listed
- Money Drop - Apps on Google Playplay.google.com · web
8 public sources were cited for this profile; the first-party ones are listed here.
Frequently asked questions
- What does Drop do?
- Toronto-based mobile rewards company whose free app pays users cash-back points on purchases with partner merchants.
- Who are Drop's investors?
- Drop's investors include CoinFund.