Gift card marketplace Raise.com has just rolled out a new mobile application that lets you save at your favorite local stores by buying unused gift cards for less than their face value. In a matter of seconds, consumers can can find a discounted gift card, purchase it in the iPhone application, and then present a barcode for scanning at point-of-sale to reduce their total out-of-pocket expenses while shopping.
The app is an extension of the Raise.com online marketplace, which we noted last December had raised $18.1 million, according to an SEC filing. At the time, the company didn’t want to confirm the details of the funding with us, but today it’s going on the record. The Series A round was led by Jeremy Levine of Bessemer Venture Partners, an investor in a number of well-known tech companies, including Pinterest, Yelp, Wikia, Shopify, LinkedIn and others.
Raise.com founder and CEO George Bousis still won’t disclose his company’s revenue, but he paints a picture of ongoing growth, saying that “hundreds of thousands” of customers have bought or sold gift cards via the Raise.com website, which has offered around 3,000 brands’ gift cards to date. At any given time, there are 750 to 850 brands available on the site, and Raise.com is expecting its customers will save over $10 million during the 2014 holiday season.
The company has also grown by over 500% since its Series A last year, says Bousis. Its headcount has grown, too – up to 107 employees over the 13 it had before the funding round.
The website, for those unfamiliar, is a typical online marketplace. Sellers can list their gift cards without any selling fees, and then Raise.com takes a 15% commission on gift card sales. The idea is that, for sellers, their unused or partially used gift cards are items they’d rather sell for a little less than face value in order to receive cash or put the funds toward a gift card of their own choosing. For buyers, Raise.com is an even more appealing – you’re basically getting free money when you buy a gift card for less than what it’s worth.
But until the launch of the mobile application, using Raise.com required a bit of planning ahead. Now, accessing the discounted gift cards is easier and quicker to do from your phone. The company is also experimenting with smart push notifications so that, in the future, the app would be able to alert you when you’ve been in a store for some time that a gift card is available.
To buy or sell gift cards in the app, consumers set up an account, confirm their mobile number (to cut down on spam), and then add their payment card information by holding up their card to the camera for automated input. (Raise.com charged my account $1.00 when I tested this, as a confirmation of your bank account.)
Then you can browse through the available cards by “top stores” (most popular), “nearby” and “trending” (recently popular). The resulting list of available cards can be sorted by type, value, % off, and price. After purchasing, the cards are delivered to your PIN-protected wallet within the Raise.com app.
Raise.com’s customers, who tend to skew slightly female and have median-level incomes, tend to sell high-value gift cards, averaging $100 to $200 per card. But with the addition of the mobile application, it’s possible that we might see sellers adding more gift cards with smaller amounts – for example, instead of abandoning a mostly used-up card in their wallet after buying what they wanted, they might decide it’s worth putting the remaining $10 dollars or so on Raise.com instead.
“It’s something that resonates with everyone, says Bousis of the Raise.com app’s appeal. “For us, it’s opening up that spectrum to allow anyone to save money at any store.”
“It’s changing the way people are shopping, that’s what mobile has done in so many instances across so many industries,” he says.