Revel Systems inks payments deal with Shell as rumors swirl of a sale to IBM

Reports claim that point-of-sale startup Revel Systems is in early acquisition negotiations with IBM, and while both Revel and IBM declined to comment when we asked about it, a deal that the startup announced today could provide an interesting clue for why a company like Big Blue might be interested in buying it.

Today Revel announced a deal with Shell, the oil and gas giant, to implement its point-of-sale system across its retail network of gas stations globally.

Shell Retail operates 43,000 sites in 70 countries and sells 160 billion litres of fuel and $6 billion in retail sales annually. Revel will be rolled out at these Shell businesses country-by-country. The U.S. (Shell’s biggest market) is unlikely to be among the first, Lisa Falzone, co-founder and CEO of Revel, said in an interview.

Features that Revel will cover in its system built for Shell include fuel and convenience store card payments; managing pumps and fuel inventory both straight from the iPad and remotely; loyalty programs; convenience store inventory; and operating in offline mode.

The deal is a significant one for a company like Revel. Similar to its many new-wave competitors in the area of point-of-sale commerce, from payments providers like Square, to those like Clover that have been acquired by larger companies, to payment startups that are also trying to consolidate and acquire point-of-sale technology (indeed Revel is also playing the consolidation game) — Revel has focused largely on smaller and medium-sized businesses.

Revel itself has installed some 25,000 POS systems with retailers to date. Its customersinclude some medium-sized businesses like the bakery chain Cinnabon, but the majority are still in the small-businesses category.

Revel signing a deal with an operation the size of Shell is a sign of how smaller and more disruptive companies are starting to gain more credibility with large enterprises — a target market for large system integrators like IBM.

• Revel’s POS system is typical of the shift that is underway in the world of commerce.
• Designed to work on commercially available tablets like the iPad from Apple, software from these younger payments and POS companies is doing battle with more clunky, expensive and antiquated incumbents.
• In its case, Revel’s software will be replacing a “thirty-year-old software system,” Lisa Falzone, co-founder and CEO of Revel, said in an interview. “What we offer is not proprietary hardware,” she added. “Off-the-shelf hardware is so much easier to scale.”

Coincidentally, IBM itself has a first-hand awareness of what companies like Revel are replacing in the market: the company in 2012 divested its own hardware-and-software POS business, selling it to Toshiba for $850 million.

While Falzone said that she “can’t confirm or deny” if IBM is working on a deal to buy Revel, it’s interesting to consider that IBM has been making some other key acquisitions to speed up its move away from its legacy business in other areas, as well, for example in cloud computing to offset declines in its legacy server business.

Revel’s solution for Shell will be based around iPad devices, which is another interesting crossover for IBM, which has been in a partnership with Apple since 2014 to develop more enterprise apps for iPad devices, one route to selling more of Apple’s hardware into those businesses.

“With Revel Systems we are implementing new tablets and payment options that are easy to use, innovative and will improve the customer experience so that customers keep coming back to Shell,” said Maggie van’T Hoff, CIO, Shell Retail, in a statement.

To date, Revel Systems, which was founded in 2010, said that it has raised more than $130 million in funding, with investors including DCM Ventures, Roth Capital and private equity firm Welsh, Carson, Anderson and Stowe.

Tweet