Chicago-based Raise, a major marketplace for gift cards, raised $56 million in a Series B funding, bringing total funds raised by the company to $81 million. Last year the start-up sold more than one million gift cards.
The latest funding round was led by New Enterprise Associates, with additional funds supplied by Bessemer Venture Partners, the Pritzker Organization, Listen Ventures and several notable angels who previously participated.
2014 was a banner year for Raise, as the company expanded its platform to accommodate more active buyers and sellers across all 50 states, released a successful iOS app, grew from 25 to 121 employees, and saw significant growth every month, including 50% revenue growth in November and December.
In conjunction with the financing, Florence will join Raise’s board of directors to provide the company with mentorship and guidance. Among others, Florence will join BVP partner Jeremy Levine on the board, who joined after BVP’s initial investment in 2013.
This influx of financial support will be used to capitalize on the company’s momentum and further position the company as a dominant player in the growing gift card industry. With a 30 percent year-over-year growth rate, gift cards are a $400 billion a year industry, but it is estimated that nearly 20 percent of prepaid funds go unused every year, with approximately $1 billion in gift card value lost in 2014 alone.
By offering an online marketplace leveraging emerging mobile payment technology, Raise is bringing efficiency into an inefficient market and changing the way customers spend their money by incentivizing them to convert at the point of sale. In addition to benefiting customers, this approach also helps retailers because it ultimately drives new foot traffic into retailers, helps increase conversion and grows basket size.
With Raise, users can buy, sell and redeem gift cards and store credit from hundreds of brands, including every major retailer. In fact, a gift card is listed or sold on the marketplace every five seconds. Cards are free to list, and the average gift card listed sells within an hour at an average site discount of 16%.
With the mobile app – currently available in iOS with Android coming soon – cards can be purchased and instantly redeemed online or at a physical store by scanning a bar code on a phone, saving users money on the purchases they already make. Raise has seen the model generate an incredible amount of user loyalty and retention, with the average web user shopping on the site a dozen times a year and the average mobile shopper using the app multiple times a week.
For more data on Raise access CardData®. For information and commentary on Raise visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. RAM Research® forecasts on Raise are available exclusively through CardWeb.com.