Grazzy

Grazzy operates a digital payments platform that lets guests tip front-line service workers without cash or an app download. Guests scan a QR code or use an on-property kiosk, select a tip amount, optionally leave feedback, and choose a payment method; the flow is designed to take 10 seconds or less. The guest-facing interface is branded to the operator's standards and can show individual team member profiles or team-level configurations, with tips and feedback attributed to the specific employee or team.

On the payout side, Grazzy distributes tips to employee-connected debit cards for instant access (stated at 30 minutes or less, 365 days a year), via ACH bank transfer, or through payroll. Employees connect a debit card to a Grazzy wallet and can transfer earnings on demand. The platform also automates distribution of credit card tips, which the company positions as a replacement for bank runs, cash safes and off-cycle checks. Grazzy provides an operator dashboard with insights, tracks tips by employee, and generates IRS tip income-compliant reporting on daily, weekly, bi-monthly or monthly cadences. The company cites PCI compliance, PII protection, cloud hosting, enterprise-level controls, union-friendly configuration, and integration readiness with existing property and point-of-sale systems (PMS, HMA, POS).

Grazzy sells to hotels, bars and restaurants, salons and spas, and car washes, positioning digital tipping as a way to raise effective wages (it claims up to 20% increases in employee earnings) and thereby reduce turnover and recruiting costs.

Founding story

The company was founded in Austin in 2021 by Russell Lemmer, previously the head of Dealerware. Its stated premise is that the shift to cashless payments reduced tip earnings for service workers and that cash constraints force employers to defer tip-outs to weekly or bi-weekly paychecks, which the company links to hourly staff turnover.

Business model

Grazzy provides a B2B2C payments platform to hospitality and service employers, which enable digital tipping for their customers and instant tip payouts for their staff. The company states it offers digital tipping enablement at no cost to enterprise customers and charges a processing fee on the instant payment option, which it describes as the lowest in the market without disclosing the rate.

Processing fees on payments, notably on the instant payout option; digital tipping enablement is offered to customers at no cost according to the company.

Traction

Grazzy said in July 2024 that it had grown its customer base 100x over the prior 18 months and had moved millions of dollars to thousands of worker wallets. Customers cited include hotels operated by Metwest Terra Hospitality/HRI Hospitality (Hotel Abri, San Francisco) and Carnation Auto Spa, which reported a 5x increase in the number of tips and a 4x increase in total tip value across 20+ Dallas-Fort Worth locations.

Latest developments

In July 2024 Grazzy announced the completion of a $4 million seed round with participation from AZ-VC, In Revenue Capital, Iron Skillet Partners, Tuesday Capital and Next Coast Ventures, earmarked for team expansion, customer onboarding, partnerships, integrations and go-to-market. The company also expanded its stated vertical coverage to include car washes.