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FiveStars gets $26 million in Series B funding

FiveStars, a loyalty-rewards start-up company, said Thursday it has received $26 million in Series B funding.

The cash infusion—led by Menlo Ventures along with existing investors Lightspeed Venture Partners, DCM and Rogers Communications—brings to $45 million the total investment in the 3-year-old business, co-founder and CEO Victor Ho told CNBC.

FiveStars’ customer loyalty dashboard.

He said the latest round of funding would help FiveStars increase hiring as well as "continue to expand very, very rapidly—and hopefully you'll see us all across the country."

Among its extensive list of ventures, Menlo has provided funding for such companies as Uber, Roku, Tumblr and Dropcam.

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FiveStars serves as a customer-service management tool that works with merchants' existing point-of-sale systems and it offers iOS and Android apps in an effort to tap into a potential customer-loyalty market that Ho values at $50 billion.

Businesses spend a considerable amount on such promotions as daily deals, paper fliers and radio ads, Ho said. "But if you talk to your local business owners, they'll tell you customer loyalty is the most important thing they care about."