Raise, which bills itself as the world’s largest gift card marketplace, has raised $60 million in a Series C funding round led by Accel, with participation from PayPal and existing investors New Enterprise Associates and Bessemer Venture Partners. This new financing brings the total capital raised by the Chicago-based company to more than $147 million.
Raise will use the new funds to accelerate the development of its closed-loop mobile payments network. The company also plans to deepen its focus on the future of prepaid cards, while aggressively building a “world-class retail partnerships team.”
The company’s online gift card marketplace enables holders of unwanted digital or physical gift cards to resell the cards to consumers who want to use them. Gift card exchanges aren’t new, but the key here is that the cards are sold at a discount—a $100 card might cost $85—so buyers can get more bang for their buck—essentially giving themselves a “raise.” And by incorporating the mobile channel, the platform enables consumers to easily purchase and redeem e-gift cards right from their smartphones, essentially turning unwanted e-gifts into a convenient and useful form of digital currency.
Raise has millions of users and has generated more than $1 billion in gross transactions to date, according to an announcement. The company has built active partnerships with nearly 400 brands to expand digital distribution of their own prepaid cards and offer them enhanced access to their customers.
As part of this round, Sameer Gandhi of Accel and Chicago entrepreneur Mark Tebbe will join Raise’s board of directors. Gandhi has led Accel’s early investments in Birchbox, Bonobos (acquired by Walmart), Jet (acquired by Walmart) and Venmo (acquired by Braintree), as well as being a seed investor in Dropbox and Flipkart.
With more than 30 years of investment and entrepreneurial experience, Tebbe co-founded Lante Corp and Answers.com, both Nasdaq-listed companies. He is also an adjunct professor of entrepreneurship at the University of Chicago’s Booth School of Business and chairman of ChicagoNEXT, the city’s public-private partnership for entrepreneurship, technology and innovation.
“This successful fundraise unequivocally demonstrates that the market believes we are reaching a tipping point in mobile payments,” says George Bousis, founder and CEO of Raise. “With Raise, our retail partners recognize the value of building direct-to-consumer loyalty through prepaid mobile payments, as Raise has unlocked the ability for brands to interact directly with their customers and own the relationship for the very first time.”
Using the Raise mobile wallet app on iOS and Android, consumers can instantly make purchases at more than 3,000 brands available on the marketplace, saving an average of 12 percent per transaction. The company plans to use its latest funding to focus on a “best-in-class, secure mobile experience that rewards its users for using the Raise Mobile Wallet.”