Recurly Bulks up Its Platform With Two Deals; CPI Card Group Acquires Arroweye Solutions

Recurly Inc., a subscription-management and recurring-billing platform, announced early Wednesday the acquisitions of digital customer-engagement platform Redfast Inc. and of Prive, said to be a Shopify-first subscription platform. Terms were not disclosed.

The rationale for the deals is that they will enhance Recurly’s ability to “manage the full subscriber lifecycle” by providing more personalized customer experiences, improve customer retention, and offer real-time engagement, the company says. Also, the deals promise to expand Recurly’s reach into e-commerce and physical-goods subscriptions, the company adds.

Recurly intends to rebrand Prive as Recurly Commerce, a service that will deliver subscription automation, pricing intelligence, and revenue optimization for business-to-consumer and Shopify-branded subscription providers such as Coterie Baby Inc.; Public Goods, a provider of home essentials; the jeweler GEM; and Kudos, a provider of Web-site management and custom app development for Shopify stores. Subscriptions for physical goods are expected to become a $1 trillion market by 2028, according to Recurly.

Inflexible subscription billing has been a problem for businesses, including retailers that offer physical-goods subscriptions, Prive argues. “As subscriptions continue to grow in the physical-goods space, businesses need flexible, data-driven tools to meet evolving customer expectations,” Prive co-founder Alex Craciun says in a statement.

Redfast will be rebranded as Recurly Engage, a service aimed at helping Recurly customers predict churn, develop personalized prompts, and devise other actions to retain customers, Recurly says. Research shows that engaged customers spend 67% more on average than new customers, the company adds.

Building a loyal subscriber base is the key to retention and growth at a time when consumer-acquisition costs are rising and consumer expectations for personalization are at an all-time high, Redfast chief executive Rajeev Raman says in a statement.

Also, payment card provider CPI Card Group Inc. announced Wednesday the acquisition of Arroweye Solutions Inc., a provider of digitally driven on-demand payment card solutions for the U.S. market, for $45.55 million.

CPI says Arroweye will enhance its platform by enabling on-demand payment card solutions, personalization, instant issuance, prepaid services, and digital solutions. CPI expects Arroweye’s revenues to be in the mid-$50 million range in 2025 on an annualized basis.

During the first quarter, CPI posted net sales of $122.8 million, up 10% year-over-year, while net income decreased 12% to $4.8 million. The increase in sales was fueled by strong performance from contactless debit and credit cards and prepaid card solutions, the company says. The decline in net income was due to what the company calls “an unfavorable sales mix, including comparisons with a very strong prepaid margin in the first quarter of 2024, and higher interest expense.”