I have tons of loyalty cards in my wallet and am always forgetting about them or leaving them at home and collecting yet another punch card when I return to the same retailer. While this is annoying for me, it’s costly for businesses, especially small ones.

Cardagin Networks aims to solve that problem. Its mobile platform digitizes loyalty card programs for small businesses, with a focus on college towns. It also allows local businesses to publish mobile ads and push them to members of their loyalty programs.

Cardagin is launching its service in April, beginning with the University of Virginia’s population in Charlottesville, VA, where the company is headquartered. CEO and founder Rob Masri believes college towns are perfect for this type of service because college students are always looking to save money and they use their mobile phones a lot. For the initial test in Charlottesville, Cardagin has enlisted several campus representatives to sign up others on campus; these reps include sports team captains, active fraternity and sorority members, and representatives from campus dorms.

Once the company has gathered data on the test market, it plans to expand to other college towns, such as Blacksburg, VA (where Virginia Tech is located), Chapel Hill, NC, and Tuscaloosa, AL. In addition, Masri is reaching out to local chambers of commerce, local ad agencies, and media outlets to help market and distribute the Cardagin solution on a revenue-share basis.

Although the company will be providing consumers with a free service to manage their loyalty programs, its main focus is on providing solutions for businesses. For a yearly access fee of $600-1,000 for the test period, merchants receive scanner-enabled kiosks, which are integrated with various point-of-sale systems, to scan mobile phones. They also receive access to Cardagin’s site, which will track coupon usage, visits, and ad effectiveness.

Businesses are charged an additional fee of $1 per day per ad to create and publish ads on the network as well as a fee of $0.10-0.25 per push to send mobile ads to consumers (the fee will vary depending on how specific the targeted demographic is). The consumer offering is free, but in the future there may be an optional monthly fee for users who want to receive promotions outside of their loyalty programs or to get real-time “discounts on demand” from, for example, local restaurants.

Cardagin’s service reduces costs for businesses that spend money printing cards, many of which are lost and don’t have any consumer information associated with them, allows smaller businesses that may not be that tech savvy to take advantage of mobile trends, eliminates fraud from stolen or counterfeit cards, and provides businesses a way to interact with loyal customers, identifying and better targeting them.

The mobile app is focused on smartphones, as those will enable mobile scanning, and is compatible with multiple platforms, including iPhone, Palm, Android, Windows Mobile, Blackberry, and Symbian. If a consumer does not have a smartphone and still wants to participate, however, he or she can manage programs online and type in the associated phone number at the retail location to receive similar benefits.

Cardagin has signed up five Charlottesville businesses for its initial 30-day test launch to ensure its systems can handle the traffic. After that, Masri expects 100 or more local businesses to digitize their programs. Based on its revenue model, Cardagin must sign up 2,500 users in the first year (roughly 10% of the University of Virginia population) as well as 50 businesses per year, each of which use the ad components of the service conservatively.

Although there are many location-based services such as Foursquare and Gowalla as well as loyalty program managers such as Scanaroo and Cardstar, Masri considers his competition to be ad outlets that are used in local markets, such as local radio, TV, and newspapers. He believes those outlets are used by local businesses without any knowledge of expected return on investment or tracking.

Cardagin, which first presented its concept at DEMOfall last year, has just secured $1 million in a first round of funding from private angels and investors. The company also presented at Capital Call in Reston, VA this week. Capital Call is hosted by Cooley Godward Kronish, PricewaterhouseCoopers, Silicon Valley Bank, Comerica Bank and Deloitte and is an opportunity for selected startups to present to 100 venture capitalists and private-equity investors.

Cardagin partnered with IT provider Sysnet Group to develop its technology.

Carrying around loyalty cards for different stores can be a pain, so moving loyalty programs to mobile phones makes sense. I’ve lost one too many “buy 10 sandwiches, get one free” cards to count. Cardagin Networks, maker of mobile loyalty card technology for retailers, is attempting to solve this problem.

The Charlottesville-based company, which just announced a $1 million Series A round of financing from private investors, focuses on developing mobile loyalty card programs for retailers, especially in college towns. Consumers using the technology can manage their loyalty cards from their mobile phones, track visits and redeem coupons and promotions from local businesses. Cardagin was selected as an AlphaPitch company for DEMOfall09.

Cardagin isn’t alone in the attempt to upload loyalty card programs to mobile phones. Companies like Scanaroo and Cardstar are working on similar offerings. According to Venture Beat, the company is launching its service in April starting with the University of Virginia’s population in Charlottesville, VA. After the launch, Cardagin plans to expand to other college towns in the region.

The management end of the loyalty program, as far as the business model goes, will be free. Cardagin plans to make money selling scanner-enabled kiosks to scan mobile phones. Again, we get into the problem of needing kiosk technology for the mobile phone coupon or loyalty program to work. Businesses will also be charged an additional fee of $1 per day to create and publish ads on the network. And Cardigan seems to think it may be able to charge consumers for special promotions outside of their opted-in loyalty programs. (*note: In a comment to this post, Cardagin CEO Rob Marsi added that the company plans to generate revenue by publishing and pushing mobile ads.)

Obtaining those kiosks will cost anywhere from $600 to $1000 per month year for the test period. Given the monthly marketing budget for small local businesses, spending any amount for one loyalty program might be pushing it. Yes, this replaces the cost of the business printing loyalty cards, but for many businesses the kiosk is still pricier than print . Also, lower-cost point-of-sale offerings will make it difficult for Cardagin to remain competitive using their current business model beyond the Virginia and Southeast college markets.

Cardagin has signed up five Charlottesville businesses for its initial 30-day test launch to ensure its systems can handle the traffic. Venture Beat notes that based on its revenue model, Cardagin must sign up 2,500 users in the first year (roughly 10% of the University of Virginia population) as well as 50 businesses per year, each of which use the ad components of the service conservatively.

Hosted by Cooley Godward Kronish LLP, PricewaterhouseCoopers LLP, Silicon Valley Bank, Comerica Bank and Deloitte, Capital Call is an opportunity for selected companies to present to an audience of 100 venture capitalists and private-equity investors. Capital Call’s selection process is rigorous and competitive.

“We are proud and honored to have been selected as a presenting company for this year’s Capital Call,” said Rob C. Masri, CEO of Cardagin Networks.  “This recognition is compelling validation that our business model is attractive and relevant to the investor community. Cardagin prides itself on addressing the demands and needs of a two-sided market and we are excited to showcase our solution at this prestigious event.”

“Cardagin Networks is potentially a game-changing company to keep your eye on. Their solution is mutually beneficial to businesses and consumers, and their timing is perfect for a market that desperately needs it,” said Carl Grant, Senior Vice President for Business Development at Cooley Godward Kronish LLP.

About Cardagin Networks

Cardagin offers businesses a unique and novel way to cost-effectively and more intelligently improve advertising by digitizing paper and plastic loyalty card programs. More information can be found at http://www.cardagin.com

“This round of funding places Cardagin in a strong financial position,” said Cardagin CEO Rob C. Masri.  “Our company is built on meeting the needs and demands of a two-sided market.  Businesses and consumers will benefit from our platform and we are delighted that investors have validated our technology and vision.”

Cardagin’s mobile platform digitizes the loyalty card programs of local businesses and gives those businesses tools to create, publish and push mobile advertisements directly to members of their loyalty programs. Consumers are able to conveniently manage their loyalty cards directly from their mobile phones, as well as track visits and redeem coupons and promotions from the local businesses that they support.  Cardagin expects to launch its platform in Charlottesville, VA this spring.

About Cardagin Networks

Cardagin offers businesses a unique and novel way to cost-effectively and more intelligently improve advertising by digitizing paper and plastic loyalty card programs. Cardagin was selected as an AlphaPitch company for DEMOfall09 and also selected as a presenting company at Capital Call 2010. More information can be found at http://www.cardagin.com.

AT DEMOFALL 2009

San Diego, CA— September 22, 2009—Cardagin Networks, Inc. (www.cardagin.com), the developer of a leading proprietary mobile advertising platform, today announced its participation in the new AlphaPitch Program at the DEMOfall 09 conference.

Companies selected for AlphaPitch undergo a rigorous selection and evaluation process. They must be in the prototype stage of their product lifecycle, pre-revenue, and have received no more than a seed round of funding.

“We are deeply honored that DEMO is offering us this unique opportunity to showcase our company at DEMOfall 09,” said Rob C. Masri, CEO of Cardagin. “We believe that our platform will revolutionize how local businesses interact with their customers and ultimately help local businesses stay in business.”

Cardagin is developing a mobile Internet platform that digitizes loyalty card programs of businesses and makes them available on mobile devices. Businesses can finally monetize their loyalty programs by personalizing mobile advertisements, collecting data on spending habits and tracking advertising dollars.  Customers can conveniently manage their loyalty cards electronically and benefit from the cost savings received from the promotions and rewards of the local businesses that they support.

“Every year I delight in finding the most promising new products that will shape trends in the coming years, and with AlphaPitch we now can offer a view into these visionary products and services even earlier in the process, ” said Matt Marshall, co-executive producer of the DEMO Conference. “Cardagin was selected after intensive scrutiny because of the potential impact it will have in transforming loyalty programs for local business and their customers.”

About DEMO

Produced by Network World Events and Executive Forums, the semi-annual DEMO conferences focus on emerging technologies and new products, which are hand-selected from across the spectrum of the technology marketplace. The DEMO conferences have earned their reputation for consistently identifying tomorrow’s cutting-edge technologies, and have served as launch pad events for companies such as Palm, E*Trade, Handspring, and U.S. Robotics, helping them to secure venture funding, establish critical business relationships, and influence early adopters. Each DEMO conference features approximately 70 new companies, products and technologies. For more information, visit www.demo.com.

About Cardagin Networks

Cardagin offers businesses a unique and novel way to cost-effectively improve advertising by digitizing paper and plastic loyalty card programs. More information can be found at http://www.cardagin.com.

CARDAGIN NETWORKS UNVEILS ITS DIGITIZED LOCAL LOYALTY SOLUTION

AT DEMOFALL 2009

San Diego, CA— September 22, 2009—Cardagin Networks, Inc. (www.cardagin.com), the developer of a leading proprietary mobile advertising platform, today announced its participation in the new AlphaPitch Program at the DEMOfall 09 conference.

Companies selected for AlphaPitch undergo a rigorous selection and evaluation process. They must be in the prototype stage of their product lifecycle, pre-revenue, and have received no more than a seed round of funding.

“We are deeply honored that DEMO is offering us this unique opportunity to showcase our company at DEMOfall 09,” said Rob C. Masri, CEO of Cardagin. “We believe that our platform will revolutionize how local businesses interact with their customers and ultimately help local businesses stay in business.”

Cardagin is developing a mobile Internet platform that digitizes loyalty card programs of businesses and makes them available on mobile devices. Businesses can finally monetize their loyalty programs by personalizing mobile advertisements, collecting data on spending habits and tracking advertising dollars.  Customers can conveniently manage their loyalty cards electronically and benefit from the cost savings received from the promotions and rewards of the local businesses that they support.

“Every year I delight in finding the most promising new products that will shape trends in the coming years, and with AlphaPitch we now can offer a view into these visionary products and services even earlier in the process, ” said Matt Marshall, co-executive producer of the DEMO Conference. “Cardagin was selected after intensive scrutiny because of the potential impact it will have in transforming loyalty programs for local business and their customers.”

About DEMO

Produced by Network World Events and Executive Forums, the semi-annual DEMO conferences focus on emerging technologies and new products, which are hand-selected from across the spectrum of the technology marketplace. The DEMO conferences have earned their reputation for consistently identifying tomorrow’s cutting-edge technologies, and have served as launch pad events for companies such as Palm, E*Trade, Handspring, and U.S. Robotics, helping them to secure venture funding, establish critical business relationships, and influence early adopters. Each DEMO conference features approximately 70 new companies, products and technologies. For more information, visit www.demo.com.

About Cardagin Networks

Cardagin offers businesses a unique and novel way to cost-effectively improve advertising by digitizing paper and plastic loyalty card programs. More information can be found at http://www.cardagin.com.