Wrapp, the new social gifting service that lets friends celebrate with free gifts of real value from attractive brands, announced that it has secured $5.5 million in Series A funding.
The funding round was led by the international venture capital firm, Atomico. Headquartered in UK, Atomico (News - Alert) has invested in more than 50 companies on four continents. The company was formed by celebrated entrepreneur Niklas Zennstrom, who also co-founded Skype (News - Alert), Kazaa and other companies. Zennstrom is joining Wrapp‘s board of directors, Wrapp revealed in a press release.
Creandum, a Nordic venture capital firm investing in innovative and fast-growing technology companies within consumer, software and hardware industries also contributed to the series A funding round. Earlier this year, Creandu led the seed funding round and supported Wrapp’s proof-of-concept test followed by its commercial launch in Sweden.
The capital accumulated from Series A funding, will be used to launch Wrapp’s social gifting service in the U.S. and U.K. A part of the capital will go to support the firm’s ongoing development of the Wrapp application.
Gift cards make up a $100 billion industry in the U.S. and the Wrapp gift service seems to leverage two mega trends – social networks and smartphones. Created for social media and smartphone users, Wrapp makes it easy to give, receive and redeem digital gift cards using mobile devices. have been the most popular gift request for four years running, according to the National Retail Federation in Washington D.C.
Wrapp was started earlier this year by Hjalmar Winbladh and a team of young entrepreneurs, including Andreas Ehn, Spotify’s (News - Alert) founding chief technology officer; Carl Fritjofsson, digital media entrepreneur and former strategy advisor to Groupon.se; Aage Reerslev, founder of mobile browser Squace; and Fabian Mansson, former CEO of H&M and Eddie Bauer.
Wrapp is currently operating only in Sweden, but it allows people around the world to download the Wrapp mobile app for giving digital gift cards to friends in Sweden from partners such as the country’s largest sporting goods retailer Stadium, Sweden’s largest consumer electronics chain Elgiganten, designer underwear brand Bjorn Borg, street fashion brand WeSC, and home improvement chain Clas Ohlson among 20 others.
“Facebook (News - Alert) made it easy to connect and recognize our friends around the world with greetings. With Wrapp, friends and family can now celebrate each other with real gifts, just as easy as sending a ‘hi,’ ‘thank you’ or ‘happy birthday’ wish. Wrapp’s quick start in Sweden clearly indicates that people are ready to make gift-giving an everyday event,” Wrapp founder Winbladh explained in a statement.
“We saw early on that Wrapp is at the center of where the gift card industry is headed. With Wrapp, retailers can now create highly targeted pay for performance campaigns and drive sales offline from desired customers online. With Atomico’s investment and help we are strengthening Wrapp’s prospects tremendously,” Creandum partner and Wrapp board member Johan Brenner added.
Early this year, Atomico made $13.5 million investment in Fon, the world’s largest WiFi (News - Alert) network. The capital was expected to help Fon take advantage of the growing demand for WiFi from smartphone and tablet users, and to expand their efforts in the US and elsewhere. The funding follows many previous rounds since the company was founded by serial entrepreneur Martin Varsavsky (Jazztel, Viatel) in 2006.
Madhubanti Rudra is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.
Edited by Jennifer Russell