A new entry into the Facebook gift card sector will arrive in the U.S. this spring, by way of Sweden: Wrapp, which has been up and running in its native country since November 15.
Wrapp is a mobile application (iPhone and Android) that enables users to send mobile gift cards to their Facebook friends. The app currently permits users to send gift cards only to Facebookers in Sweden, but it is aiming for a spring launch in the U.S.
The $10.5 million series-A funding received last month from Greylock Partners and Atomico, the latter founded by Skype Co-Founder Niklas Zennström, will be used for the U.S. expansion. Wrapp also announced last month that LinkedIn Co-Founder Reid Hoffman of Greylock joined its board of directors.
Here’s how Wrapp works: Users who have installed the app receive reminders about their friends’ birthdays (although gift cards can be sent for any occasion). Wrapp then matches the social profile of the targeted friend with available partners that match his or her demographic, and users can send free gift cards that the partners make available, or add on to the amounts.
Founder and Chief Executive Hjalmar Winbladh offered more details:
Retailers have the opportunity to offer free gift cards to their demographics through the Facebook social graph to consumers they would like to reach. Fashion retailer H&M has found that women aged 25 to 35 are great spenders in its stores, so it will provide $5 free gift cards to people who match that social profile in the app. Matches are targeted to demographics — a 14-year-old girl won’t find H&M, and neither will a 55-year-old man.
Once the gift cards are received via the mobile app, they can be redeemed via bar codes that display on Wrapp after confirmation that the recipient is in a location that accepts the gift card. Physical gift cards are not necessary. Winbladh added:
Our idea is to trigger a push event to your smartphone that you have a couple of friends who have birthdays and you should celebrate them. The friends receive gift cards, optimized with users’ messages, in-phone, and they are stored inside a wallet in the app. Clicking on the gift card in-store displays a barcode, and Wrapp provides reminders about expirations.
From the retailers’ standpoint, the only element of the transaction they are charged for is a commission on actual sales, with the remainder of the process available to them free-of-charge.
Most retailers are desperately looking for ways to monetize their pages on Facebook, and to monetize social and mobile, in general. Wrapp gives great value to the like button in many ways.
According to Winbladh, 4.8 million people in Sweden, out of its total population of nine million, are Facebook users, and two percent of those are active on Wrapp, which has resulted in 600,000 gift cards given since the November 15 launch.
And, as he pointed out, the U.S. market is 50 times bigger, and far more mature as a market that accepts gift cards, which is why Wrapp is busy lining up retail partners in anticipation of its spring launch.