Coffee ordering and payments app Hey You has announced a $2 million Series B funding round as it looks to enter its next growth phase. The round, led by existing investors Reinventure and Exto Partners, will go towards supporting Hey You’s vision to expand nationwide to become Australia’s number one cash-free marketplace.

“We’ve grown at an incredibly fast rate over the past year following the merger of E-Coffee Card, Posse and Beat the Q, to create the Hey You super app. We successfully grew our team, secured a partnership with Westpac and quadrupled our revenue,” said Rebekah Campbell, founder of Hey You.

Users have access to Hey You’s core features such as order, pay, loyalty benefits, new store discovery and connection with small business owners. With this funding, customers will now start to see these functions roll out to more and more food and drink venues across the country, with the app expanding beyond its original focus on coffee to lunch and other meals.

In hand with this funding Hey You has appointed Shaun Cornelius as new CEO. Cornelius is a seasoned entrepreneur and has worked on projects like Our Deal, which was sold to coupons giant Groupon last year. As new CEO Cornelius will be responsible for solidifying Hey You’s position in the marketplace, tasked with pushing acceptance of the app among merchants and customers, who want higher client intake and faster customer service.

“Hey You is an exciting business with a highly engaged set of merchants and customers. The market is evolving and there is huge opportunity for Hey You to further expand its footprint. I’m looking forward to working with Rebekah Campbell and the team to lead its product vision and strategy into its next stage of growth,” said Cornelius.

Following the merger and rebrand to Hey You last year, the company is now processing 13,000 paid transactions every business day and is used by 200,000 Australians in over 700 venues, boasting a consistent 4 percent week-on-week growth. Campbell said this growth has come from Hey You spending time and money on developing and refining the product thinking from both a merchant’s point of view and a consumer’s.

“Now we have venues doing 500 transactions a day going through our app, so it’s become an integral part of a whole lot of cafes’ business,” she said. On the customer side Campbell said Hey You will continue to expand into more cafes and pubs to give a greater experience, with customers increasingly wanting to use the app to order more than coffee.

In 2015 Westpac predicted Australia would be ‘relatively’ cash free by 2022 and revealed that already 53 percent of the population are already living cashless. Through the Reinventure Fund, Westpac invested $5 million into Hey You last year and also integrated consumer banking into the app to drive forward the company’s growth.

Campbell said that in terms of growth, partnerships with large corporations like Westpac have been critical in accelerating the business around Australia and driving merchant uptake. “I think that for other startups reading, there can be skepticism around big corporate partnerships, but that is one that has worked really well and superseded all expectations,” she said.

Managing Director of Reinventure, Simon Cant added, “Hey You has demonstrated a strong growth in the last year and a half and is well positioned to dominate the order ahead market in Australia.” Hey You will also keep an eye open for any more acquisitions, though for now it will remain local with the aim of dominating the Australian market before considering any global moves.

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Mobile ordering app Hey You is tapping into the growing appeal of Uber in Australia, partnering with the ride-sharing company to propel its ambition of a truly cashless future. The app, developed by Beat the Q Posse Group and backed by Westpac’s venture capital arm, allows users to order food and drink from local cafes and book transportation via Uber X.

Launched last year, Hey You is the flagship application developed by Beat the Q Posse Group, a company created via the merger of Beat the Q, Posse, and eCoffeeCard platforms. Buoyed by Westpac’s support, Hey You has made swift inroads into the local market in the last six months, with the app boasting 65,000 transactions per week, and average orders per day up from 2500 to 9500.

For Rebekah Campbell, founder and CEO of Hey You, the decision to combine Beat the Q, Posse and eCoffeeCard — all geared towards improving the cafe experience (finding a cafe, ordering ahead and a loyalty program) — has been pivotal to building Hey You’s momentum. “We saw that each of the apps had a good number of cafes on them and a good number of users, but it was quite annoying for users to use one app for finding a cafe and another for ordering them,” Ms Campbell said.

“We thought it would be much better to bring the three businesses together and create a super app.” The partnership with Uber sees new functionality introduced on the Hey You platform, with customers able to order coffees, lunches and taxis through a single interface.

According to Ms Campbell, the decision to partner with Uber was driven by the needs of Hey You’s customer base. “A lot of our customers are using ride-sharing services like Uber X, and given the high level of popularity, we decided to partner with the service,” she said. While Uber X remains a controversial service in Australia, Ms Campbell said she was confident the regulatory uncertainty surrounding the service would be resolved in time.

“Uber X is the future and people who use Hey You are generally technically progressive, so the audience that uses ride-sharing is the same that’s comfortable using app-based transactions.” Apart from the Uber deal, Hey You has also secured the Australian Open this year, with guests using the app to order and pay for drinks and snacks which are delivered straight to their seats.

While the latest deals point to the broader potential of the Hey You app, Ms Campbell said the immediate focus was to extend its presence in the hospitality space. “Bars and pubs are something we will go into next, and we are also starting to do some work with restaurants as well, so you can order from your table,” she said. “We can potentially go into a number of segments but we want to get to a position where we dominate the hospitality sector.”

With Hey You at the coalface of the cashless society trend, Ms Campbell said reliance on cash or cards to make transactions has diminished significantly in the last couple of years. “The things you actually use cash for on a day-to-day basis are generally transport and food or coffee, but leaving your wallet at home today means nothing today,” she said.

Westpac’s tech-focused venture capital arm Reinventure led the $5 million funding round for Beat the Q Posse Group in August last year and Ms Campbell said the bank had been “incredibly supportive”. “I have been shocked at how engaged the bank has been in our product, given how small we are in a business that size,” she said. “They have been very active in finding out what value we can provide to Westpac.”

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Westpac's tech-focused venture capital fund Reinventure has led a $5 million funding round for cafe services start-up Beat the Q Posse Group, which is poised to rebrand its flagship app after three separate start-ups effectively merged to become one late in 2014. The series A funding round, which  the company said was oversubscribed, was also backed by Exto Partners. It is the second investment since late June for Reinventure, which became the first Australian banking venture to invest in a Bitcoin company, Coinbase.

Reinventure and Exto Partners are the first institutional firms to back the group, as foreshadowed by Street Talk, with early-stage funding having come from angel investors including Silicon Valley heavyweight Bill Tai, Yahoo Global chief financial officer Ken Goldman and Google Maps founder Lars Rasmussen. Australian backers include Macquarie Bank head of principal investments Alex Harvey, Reckon founder Greg Wilkinson and Vocus Communications founder James Spenceley.

Beat the Q Posse Group is an amalgam of three formerly separate companies, Beat the Q, Posse and eCoffeeCard, which formally became one company in October 2014. Rebekah Campbell, co-founder of Posse, said the money raised would go towards product development and scaling. The company will rebrand its flagship application, Beat the Q to Hey You, from August 10. "Over the past six months we've focused on building the team to scale the business," Ms Campbell said. "We've brought on a senior engineer from Bigcommerce and the head of sales from Groupon, who has a team in Melbourne."

The motivation for the earlier merger had been the recognition that there could be only one dominant player in the cafe scene, Ms Campbell said. "There were a whole lot of apps attacking different problems in the customer loyalty space. As a consumer I wasn't using any of the products because I couldn't be bothered downloading all the apps to use at each cafe," she said.  "We're going to end up with a winner-takes-most situation and Posse was in a good position because of its scalable network. Adam [Theobald] had built a great product at Beat the Q, and had also purchased eCoffeeCard, so it was a natural coming together."

Best of three in one

The Beat the Q app, the company's flagship, lets users order from their cafe en route. The new Hey You app will incorporate features from all three brands. Posse built a service that connects consumers and shops through a social network, and eCoffeeCard was a customer loyalty app.

"We're looking forward to launching new features such as group ordering and beacon-enabled table service," Ms Campbell said. The business is processing 40,000 transactions a week, with some cafes taking 100 orders a day using the app. In six months it has increased its customer base by three times and is increasing 4 per cent each week. Mr Theobald said the venture capital scene had developed in the past four years. "It's a really exciting time ... now there's corporate venture capital coming into the market and it's increasing interest in the start-up space," he said. "I have no doubt that it's difficult as an early fledgling start-up, but I think it's come a long way and Reinventure is leading that."

Reinventure co-founder and managing director Simon Cant said he had been following the group for some time and had been impressed by Beat the Q's high user engagement and Posse's track record of growth. "Based on the product vision and scaling plan, we believe that the integrated product will become an indispensable tool for Australian cafes and other merchants. We very much look forward to supporting them to achieve that goal," Mr Cant said.

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Westpac is leading a $5 million investment into coffee app startup Beat The Q. The bank’s Reinventure fund and VC firm Exto will join the startup’s angel investors Maitai founder Bill Tai, Yahoo CFO Ken Goldman and Google Maps co-founder Lars Rasmussen.

In 2014 Posse founder Rebekah Campbell and Beat the Q founder Adam Theobald merged their companies in the hope it would give them a better shot at breaking into the hospitality industry. The latest round of funding will be used to develop new products like beacon enabled table services, Campbell said. “There are so many ways technology can improve the way we discover, transact and interact with shops and we’re excited to be working with great partners such as Reinventure and Exto Partners to bring our vision to the world,” Campbell said.

Since the merger Theobald said the startup’s customer base has “tripled” in six months. “We’re now processing more than 40,000 food and drink orders every week, and have transacted $10M on behalf of our cafes,” he said. But later this month Beat the Q will be rebranded as Hey You. The new app will combine the company’s three products so users can order, pay, gain loyalty benefits and discover new venues in the same place.

Reinventure co-founder and MD Simon Cant said high user engagement was the key reason behind the decision to invest. “Based on the product vision and scaling plan, we believe that the integrated product will become an indispensable tool for Australian cafes and other merchants,” he said.

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Online cafe startup Beat the Q PosseGroup has closed an oversubscribed $5 million funding round following a merger at the end of last year. Shopping recommendation platform Posse merged with Beat the Q, a mobile ordering startup, which had just purchased E-Coffee Card, in October 2014.

Beat the Q Posse Group now becomes ‘Hey You’, a dining application aiming to improve the payment process for cafe customers. Through the new app, users can order, pay, gain loyalty benefits, discover new places and connect with storeowners. The latest Series A funding round was led by Westpac’s Reinventure and venture capital firm Exto Partners.

“It’s all about growth”

 Posse founder and CEO Rebekah Campbell says the cash injection will be used to grow the new brand.

“It’s all about growth,” Campbell says. “We’re attacking different cities and expanding.” The userbase is growing 4% week-on-week, Campbell says, with 40,000 paid transactions per week and 450 participating cafes. She says the new app is a natural progression following the merger.

“We looked at our vision for the company and interviewed a lot of users,” Campbell says. “We want to bring cafe owners and customers together and help store owners get to know the names and faces of customers.” “People go the same place every day but don’t even know the name of the people there. “Our vision is to make the city feel a little more human, so everywhere you go you can feel like a local.”

The Posse journey

Posse originally launched in 2010 as a startup focusing on the music industry, allowing bands a platform to reward dedicated fans. It was later sold to Future Music, where it still operates as futurefans.com.au. The only thing that remained was the name, as Posse relaunched in 2012 as a retail-focused app. It initially raised $1.2 million in funding and a further $1.5 million in July last year from investors.

The app had a network of 50,000 shops and 110,000 shoppers, but Campbell she they struggled to monetise it, leading her to look for a partnership. “We didn’t have a great business but we did figure out how to scale,” she says. “So the best option was Beat the Q, and they had very much the same vision as I did.”

Transition to Hey You begins on Tuesday, with the newly designed app going live over the next couple of weeks. The plan for the rest of the year is to focus on expanding across Australia, Campbell says, as well as introducing new features that focus on dine-in customers.

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