Another disruptive service is launching in Sweden today. Wrapp, a new social gifting service, has just received $5.5 Million Series A funding led by Atomico, the international venture capital firm formed by Niklas Zennström, the co-founder of Skype, Kazaa and other companies. The company plans on updating the gift card model to the current era by tying their service to smartphones and social networks. The service is now out of its test phase in Sweden and will be launching in the US and UK in the first quarter next year, with the rest of Europe soon to follow.
There’s already a huge market for gift cards, and there’s even greater potential if you also give them social hooks, instant gratification, and targeted marketing. In 2006, a study showed that gift cards were the second most given gift in the U.S., and Wrapp estimates the size of the gift card market in the United States at $100 billion.
Compare those numbers with their eight week long test launch in Sweden. In that short period of time, they were able to reach roughly 1/3 of the Facebook users in Sweden, which is around 1.84 million users. In this testing period they were also able to target 258000 people in the coveted 25-30 age range.
Wrapp has a fairly simple premise behind it. It allows you to send gift cards online to your friends on special occasions, such as their birthdays. The service not only allows you to buy giftcards, but you can also choose from the free giftcards available from well known retailers. When a gift card is sent to a person, they will receive a notification on Facebook, and if they have the Wrapp app installed on their iOS or Android device, they will also be able to show a barcode to be scanned by retailers to receive their discount.
“Wrapp is targeting a huge market by leveraging two mega-trends: social networks and smartphones,” said Zennström, who is joining Wrapp’s board of directors. “If anyone can disrupt the gift card industry for the better – make it larger by taking it digital, mobile and social – it’s the talented team at Wrapp.”
Wrapp was started around nine months ago by Sendit and Rebtel co-founder Hjalmar Winbladh as well as a team of young entrepreneurs including Andreas Ehn, Spotify’s founding chief technology officer; Carl Fritjofsson, former strategy advisor to Groupon.se; Aage Reerslev, founder of mobile browser Squace; and Fabian Mansson, former CEO of H&M and Eddie Bauer.
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