Over two years after McDonald’s bought Israeli startup Dynamic Yield, a developer of a customer personalization platform, for about $300 million, the fast-food giant is selling the Israeli unit to Mastercard.
The purchase in 2019 was McDonald’s largest company acquisition in 20 years.
Mastercard said in an announcement Tuesday that Dynamic Yield’s technology was “a natural addition” to the financial services company’s services “that help brands deliver more effective and trusted customer experiences across channels.”
“The notion of going into a store or opening a webpage to find an experience perfectly tailored to you is no longer farfetched. It’s a reality that more brands are deploying and more consumers expect. With Dynamic Yield’s expertise and our scale and relationships, we’ll be able to bring the connections between the end consumer and our customers to new heights,” said Raj Seshadri, president of Data and Services at Mastercard, in a statement Tuesday.
Founded in 2011, Dynamic Yield developed an AI omnichannel personalization engine that, it said, helps power campaigns to deliver individualized customer experiences across mediums (online, mobile apps, email, kiosks, IoT, and call centers).
McDonald’s had hoped to boost sales using the technology to create drive-through menus that change based on the time of day, weather, current restaurant traffic, and trending menu items, and display additional items based on customers’ current selections at ordering kiosks.
But, earlier this year, McDonald’s indicated that it was looking to sell all or part of Dynamic Yield’s technology amid complaints from franchisees that the expected increase in sales was not forthcoming.
With Dynamic Yield’s sale to Mastercard, McDonald’s plans to retain some of the capabilities offered by the Israeli company “to further scale… globally and across ordering channels,” according to the announcement. The companies did not provide further details.
Seshadri said Mastercard was “delighted to continue working with McDonald’s, a longstanding client and proven innovator in this space.”
The terms of the acquisition, expected to close early next year, were not disclosed.
Dynamic Yield had remained an independent company based in Tel Aviv and New York after the McDonald’s purchase. The company said it has come to work with over 400 clients across the retail, financial services, travel, and restaurant industries.
With the sale to Mastercard, Dynamic Yield’s current chief technology officer, Ori Bauer, will take on the role of CEO, and co-founder and current CEO Liad Agmon will stay on in an advisory capacity, according to the announcement.
The Israeli company had previously raised close to $83 million from investors including Korea’s Naver Corp., Israeli private equity fund Viola, and Israeli VC fund Vertex Ventures.
Separately, Mastercard recently opened a new innovation lab in the southern Israeli city of Beersheba with a mission to work with early-stage Israeli startups on fintech (financial tech) and cybersecurity solutions for the payments and energy industries worldwide.