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Raise gets $60M to build out its gift card trading platform
Correction: to trading gift cards
Do you have gift cards with remaining balances that take up extra space in your wallet or desk drawer? Gift cards that are often forgotten, lost, or expire before you get to the store where you never even shop?
If so, Raise has a solution for you. With Raise, you can sell gift cards and buy discounted gift cards. The fast-growing startup just landed a $60 million series C round from Accel Partners, Bessemer Venture Partners, PayPal, and New Enterprise Associates, bringing its total financing raised to $147 million.
George Bousis, Founder and CEO, told VatorNews about the inspiration behind the concept; his company’s niche on the market of big business; the innovations in the Raise mobile app; and promised quickly evolving new technology.
What inspired the idea of trading gift cards?
GB: I was looking into gift card and loyalty ideas for my family’s grocery business. During my research, I found that 20% of gift cards go unused each year, totaling billions of dollars. I knew there had to be a better way. So, in 2013, I founded Raise to help those who have unwanted gift cards take control and get cash for their cards. Since then, we’ve built the company into a leading retail payments company, raised $147 million from investors, and saved our members more than $140 million to date.
What’s behind the name "Raise"?
GB: With the average Raise member saving hundreds of dollars per year, it’s an easy way for American consumers to essentially give themselves a raise.
Who are your competitors?
GB: We don’t have any true competitors because Raise is the only mobile wallet that truly incentivizes users to use gift cards and works directly with nearly 400 brands. We’re competing against the old-school gift card market, which hasn’t innovated much since Blockbuster invented the gift certificate in the ‘90s.
Who is your customer?
GB: Our customer is anyone who wants an easy way to save money on every purchase. There are millions of users on Raise, and we find that it is particularly popular among millennials.
What are the cultural/technological tailwinds that are creating your market opportunity?
GB: There’s a lot of talk about the “retail apocalypse” as many retailers are struggling to make their businesses digital to compete with Amazon and other successful e-commerce businesses. There’s also a growing move toward mobile payments and we’re helping our retail partners seamlessly make that transition with our app. A few years ago, purchases on Starbucks’ mobile app didn’t even register as a line item on their P&L [financial statement] and now mobile app payments account for about 50% of their purchases.
Tell us a bit about your business model?
GB: Raise takes a 12% transaction fee from a seller. For retailers and bulk sellers, the transaction fee ranges depending on the volume of gift cards.
What is the latest major development for the Raise App users?
GB: We announced a new mobile wallet earlier this year -- some of the innovative features on Raise's mobile app include state-of-the-art location technology, redesigned cart and optimized checkout (now supporting credit cards, PayPal, Apple Pay, Android Pay and Samsung Pay on compatible devices), easy access to gift cards and the ability to reserve gift cards.
What is your next step in the Raise marketplace?
GB: With the new capital, Raise is accelerating the development of the first closed loop payments network that currently partners with more than 400 brands and their currencies, including gift cards, to connect them with consumers and build brand loyalty and retention. We’re also working on some exciting, new technology that we should be announcing in the coming months.
Today on Raise, you can sell your gift cards, and you can find and purchase other discounted gift cards among major brands including Macy’s, Target and Kohl’s, and restaurants like The Cheesecake Factory, Chipotle and Chili’s. Within the easy-to-use app, once you turn on access to your whereabouts, Raise sends you notifications when you’re close to a location where your cards can be spent. This way, you can keep track and make sure to use up the balance. Raise also offers a 1-year guarantee on purchased gift cards, even on those that are inactive or show an inaccurate balance.
As Bousis says, using Raise is truly “an easy way to save money on every purchase.”
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