Chicago-based Raise, a used gift card marketplace, has secured an additional $60 million in funding from investors including Accel and PayPal.
Raise founder and CEO George Bousis said the company plans to use the new funds to accelerate development of the company’s mobile network enabling consumers to store, manage and redeem gift card balances at more than 400 U.S. retail partners.
“We’re seeing a shift in the way gift cards are used, with more consumers purchasing the cards for everyday use and in conjunction with promotions, and having the ability to manage these in one place means they don’t need to use multiple gift card apps from multiple stores,” Bousis said.
Gift card buyers may purchase unused gift cards directly from the site with no extra fees beyond the price. Sellers pay a 12% fee.
On the Raise site, brand marketers sell gift cards directly to consumers, and those retailers—including Overstock.com, Hotels.com and Barnes & Noble—comprise about 40% of transactions on Raise’s platform, according to Bousis. The remaining 60% are individuals buying and selling unused gift cards and to date Raise handled gift cards sales to about 2 million consumers.
Raise has relied primarily on word of mouth for its marketing so far, but with its latest funding, the company plans to begin promoting its services more broadly, emphasizing deals and promotions available with gift cards.
“We see growing interest from merchants who want to sell gift cards to consumers online, bypassing the friction of physical distribution and giving them the opportunity to give consumers price breaks directly via gift cards sold below their face value, which eliminates the complexity of many third-party promotions,” Bousis said.
So far Raise has secured a total of $147 million in funding in separate rounds.