When Headphones.com founder Andrew Lissimore couldn't find adequate loyalty solutions within Shopify's ecosystem, he built his own - and it just became a $3.1 million startup. Lantern is now helping other e-commerce brands boost retention rates through customizable loyalty programs, having proven itself by doubling Headphones.com's repeat purchase rate from 30% to 50%.
Andrew Lissimore has been running Headphones.com for nearly a decade, watching audiophiles hunt for the perfect gear. But he was tired of burning cash on Meta and Google ads just to replace churning customers.
The audio retailer needed better retention, not more acquisition. Lissimore scoured Shopify's app ecosystem for loyalty solutions but found mostly basic spend-and-tier programs that felt bolted on rather than integrated. So he did what frustrated founders do - he built his own.
What started as an internal fix at Headphones.com just became Lantern, a $3.1 million seed-funded startup that's reimagining customer retention for Shopify merchants. The round was led by Salesforce Ventures with backing from Sidekick Partners, Day One Ventures, and individual investors including Vessi footwear's Tony Yi.
"I think we were in the perfect spot to come up with something like Lantern because we were so desperate to increase the repurchase rate," Lissimore told TechCrunch. "A lot of businesses like clothing brands or makeup brands have naturally built-in repurchase, but for us, it was existential."
The desperation paid off. After implementing Lantern, Headphones.com's repeat visitor purchase rate jumped from 30% to 50%, while the average time between first and second purchases dropped from 198 days to just 98 days.
But Lissimore knew he couldn't scale this alone. He convinced two former Shopify designers - Kyle Peatt and Dominic McPhee, who built the company's widely-used Polaris design system - to join as co-founders. Peatt now serves as chief design and product officer, while McPhee handles the tech as CTO.
"We thought it would be great to have a Shopify native system for loyalty that is easy to customize and integrate," Lissimore explained. Their insider knowledge of Shopify's architecture became Lantern's secret weapon.
Unlike competitors like LoyaltyLion and Yotpo, Lantern promises zero-code integration. Merchants can launch loyalty programs, referral systems, and account management tools without hiring developers or dealing with clunky pop-ups and redirects.
The company's client roster includes Counter, a skincare brand pulling in over $200 million annually, and footwear company Vessi. Lantern's eight-person team has built analytics tools to prove ROI to skeptical merchants who've been burned by loyalty programs before.
"Lantern brings together something unique," said Rob Keith, partner at Salesforce Ventures. "Andrew built and scaled Headphones.com and lived these retention challenges as a merchant, while Kyle and Dominic come from Shopify, where they built the Polaris design system that thousands of developers use today."
Keith highlighted Lantern's wallet functionality, which appears directly in checkout flows without disrupting the shopping experience - a detail that matters when conversion rates hang in the balance.
The timing couldn't be better. E-commerce customer acquisition costs keep climbing while iOS privacy changes make retargeting harder. Retention has shifted from nice-to-have to survival strategy, especially for brands selling products with longer replacement cycles.
Lantern's roadmap includes AI-powered insights and retention recommendations, betting that data-driven personalization will separate winners from losers in the loyalty space. For a founder who started this journey just trying to sell more headphones, Lissimore has stumbled into solving a much bigger problem.
Lissimore's journey from frustrated e-commerce owner to funded startup founder illustrates how the best B2B solutions often emerge from founders solving their own problems. With Shopify's ecosystem continuing to expand and retention becoming critical for e-commerce survival, Lantern is positioned to capture a significant slice of the growing loyalty platform market. The combination of proven results, insider platform knowledge, and strong investor backing gives the startup a solid foundation to challenge established players like LoyaltyLion and Yotpo.
