Loyalty Management UK (LMUK), the company established to operate a new consumer loyalty programme sponsored by Barclaycard, has secured £25 million in equity financing from Warburg Pincus.
LMUK will launch and operate Nectar, which brings together Sainsbury's, Barclaycard, BP, and Debenhams to form the UK's largest customer loyalty programme, which is expected to sign up over 50 per cent of all UK households following its autumn 2002 launch.
Rob Gierkink, chief executive officer of LMUK, says: "Warburg Pincus' support enables us to put in place the financial foundation for the successful launch and development of LMUK."
Nectar will target the more than 12 million consumers who are members of points and rewards programmes currently operated by Sainsbury's, BP, Barclaycard and Debenhams. The new programme will offer consumers the ability to collect points from more than 1800 Sainsbury's, Debenhams and BP outlets and with all Barclaycard purchases. Points collected in the Nectar program will be exchangeable for a wide range of rewards like grocery discounts, consumer goods, flights, holidays, restaurant meals, family days out and cinema tickets.
Joseph Schull, a Warburg Pincus Managing Director, comments: "In evaluating this investment opportunity we have been very impressed with the vision of the four launch sponsors and with their commitment to making Nectar the UK's most successful loyalty program."
The investment in LMUK is being made jointly by two funds, Warburg Pincus International Partners, a $2.5 billion fund, and Warburg Pincus Private Equity VIII, a $5.3 billion global fund that closed in April 2002.