Stockholm-based Wrapp raises $15 million as social gifting matures

June 14, 2013 Leave a comment

Wrapp raises $15 million as social gifting matures

June 13, 2013: 7:30 AM ET

Stockholm-based Wrapp is locking up more funding and moving headquarters to San Francisco.

By Kurt Wagner, reporter

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FORTUNE — Stockholm-based Wrapp, the company known for giving away gifts, is on the receiving end of a present from Sand Hill Road this morning — $15 million in funding. Wrapp, whose app enables users to send free and paid gift cards to friends or family using a smartphone or Facebook, today announced a Series B funding round that increases the company’s total fundraising to more than $25 million. Three Series A investors, including Greylock Partners and Atomico, were joined by three new investors, including American Express (AXP), in the new round.The new financing is intended to expand Wrapp’s U.S. operations, including its San Francisco office, says CEO Hjalmar Winbladh. The company plans to relocate its user-facing team from Stockholm to San Francisco, which will make the Silicon Valley office the company’s largest. Winbladh also hopes to add more U.S.-based retail partners in the near future, citing the “maturity” of the U.S. market as a core reason behind the decision to expand. Wrapp already partners with retailers like Nike (NKE), Victoria’s Secret, and Gap (GPS), but has other major corporations atop its wish list: Apple (AAPL), Amazon (AMZN), and Best Buy (BBY), to name a few. Wrapp users have sent nearly 15 million gift cards using the app, says Winbladh, although only 9 million have been received (users aren’t able to receive gift cards if they don’t have the app). Of those 9 million, roughly 18% are actually redeemed, he adds.

The social-gifting landscape has changed dramatically in the past year, and a number of companies were acquired as the shift toward mobile payments and e-wallets took hold. Facebook (FB) purchased the gift-giving app Karma just over a year ago for more than $80 million, according to Bloomberg; LaunchRock bought (and then shut down) Giftiki in the fall, a startup that allowed users to pool their money to buy friends or family expensive gifts as opposed to numerous cheaper ones; and just last month Giftcards.com purchased San Francisco-based Giftly, a company similar to Wrapp, in order to expand its mobile presence. Where Wrapp seems to differentiate itself, however, is in the (monetary) support it has received from VCs. (Giftly, for example, had raised $2.8 million in funding at the time of its acquisition. Giftiki raised just over $1 million.) Wrapp’s board also has some notable names, including LinkedIn (LNKD) co-founder Reid Hoffman, Skype co-founder Niklas Zennström, and former CEO of Eddie Bauer and H&M Fabian Månsson.

Winbladh has no plans to sell his company, which he started in his native Stockholm in 2011. Instead, he feels that the app could someday be used by retailers as a marketing tool to target possible consumers. The Wrapp application currently has a “Brand Pages” section that allows brand loyalists to receive extra gift cards or exclusive rewards. He also envisions geo-targeted campaigns in the future, where simply walking by a retailer may elicit a coupon or gift card sent directly to the user’s smartphone. Says Winbladh, “There is so much left to do in this space.”

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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