New Enterprise Associates has led a $56 million Series B funding round in Raise, an online marketplace for gift cards. Other participants in the funding round include Bessemer Venture Partners, the Pritzker Organization, Listen Ventures and existing angel investors. The funding brings Raise’s total capital raised to $81 million. Tony Florence, general partner at NEA, will join Raise’s board of directors.
Raise, the largest online marketplace for gift cards, today announced that it has raised $56 million in a Series B funding round led by New Enterprise Associates (NEA), with additional funds supplied by Bessemer Venture Partners (BVP), the Pritzker Organization, Listen Ventures and several notable angels who previously participated. This round brings total funds raised by the company to $81 million.
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, sold more than one million gift cards, grew from 25 to 121 employees, and saw significant growth every month, including 50 percent revenue growth in November and December.
“Raise is one of the fastest-growing companies we’ve ever seen,” said Tony Florence, general partner at New Enterprise Associates. “There is clearly tremendous market opportunity in making it easier to buy, sell and redeem gift cards, and Raise’s marketplace streamlines the process, integrates advanced mobile payment technologies, and delivers an unbeatable value proposition to merchants and consumers. With growth in the double digits every month, we’re very excited to partner with Raise as they build on that rapid growth and begin to execute on a massive scale.”
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 percent.
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.
“There is a lot of untapped potential in gift cards, and we have built Raise to help users harness that potential,” said George Bousis, founder and CEO of Raise. “We are extremely grateful to our investors, whose support validates our efforts and shows that we have created something special. Much like how online shopping has fundamentally changed the way people shop for products, Raise is changing the way people pay for those products. By digitizing physical gift cards and store credits into transferable electronic credits, a user standing in line at their favorite coffee shop can now instantaneously find and buy a corresponding gift card and redeem it at the store counter, pocketing instant savings. This is just the beginning, and we have an exciting road ahead of us as we continue to transform the gift card industry.”
Bousis, 27, launched the company in February 2013 and was just honored by Forbes as one of the “30 under 30” tech stars to watch.
Raise.com is the largest, most trusted gift card marketplace, where members can save on gift cards to any brand and sell gift cards or store credit for cash. For every seller cashing in on old cards or credit, a happy buyer saves on a favorite store, brand or restaurant. At any given moment, there are about 900+ stores featured and, to date, more than 3,000 retailers have been listed on the marketplace. With the Raise iOS app, members can take the marketplace on the go and instantly redeem cards or credit right at the store counter. Every transaction is verified and insured with a 100 percent money-back guarantee. Whether you’re buying or selling, we’re here to make your money worth more. Give yourself a raise — on us. To learn more or to try it for yourself, visit Raise.com or download the Raise iOS app from the App Store.
About New Enterprise Associates
New Enterprise Associates, Inc. (NEA) is a global venture capital firm focused on helping entrepreneurs build transformational businesses across multiple stages, sectors and geographies. With approximately $13 billion in committed capital, NEA invests in technology and healthcare companies at all stages in a company’s lifecycle, from seed stage through IPO. The firm’s long track record of successful investing includes more than 195 portfolio company IPOs and more than 320 acquisitions. For additional information, visit www.nea.com.