Digital gift card platforms are raising venture capital and private equity funding to drive growth

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Many consumers are perceiving gift cards as an alternative to cash, and as a result, the average number of gift cards bought per consumer per year has been on a constant increase, especially in countries like the United States and the United Kingdom. Furthermore, gift cards have also emerged as the most requested gifting item during the holiday season. In the United States, for instance, 54% of Americans said that gift cards are the most requested items during the 2022 holiday season, according to a report from the National Retail Federation.

The growing adoption of digital gift cards has led to a high growth period for providers in the last 12 months. To further support their growth and scale their operations by launching new products and categories, digital gift card providers are raising venture capital and private equity funding rounds globally.

• In November 2022, Givingli, the United States-based digital card and gifting platform, announced that the firm had raised US$10 million as part of its Series A funding round, which was led by Seven Seven Six. The digital gift card marketplace has differentiated itself from others by including social elements such as the ability to chat with friends and families. Furthermore, users also receive birthday reminders, so that they can share digital cards through social media, e-mail, or text. The firm is planning to use the funding round to double down on its efforts to create more value for all its users.

Along with consumer-focused gift card providers, the trend of fundraising is also seen among business-focused gift card providers. For instance,

• In November 2022, WeGift, the incentive marketing startup, announced that the firm had raised £26 million in a Series B funding round, which was led by Element Ventures. The API-driven platform provided by the firm is used by leading brands, including Nike, Airbnb, and Aldi, among others. More than 100 brands are using the platform to disburse gift cards online to their most loyal customers globally. With the Series B funding, the firm is now planning to expand its operations in the global markets.
• Cobee, the Spain-based employee benefit super app, also announced that the firm had raised US$41 million in November 2022. The Series B funding round for Cobee was co-led by Octopus Ventures and Notion Capital. Like WeGift, Cobee provides its services to more than 800 businesses, including N26, Ogilvy, and Booking, among many more.

Along with gift cards, the firm also provides benefit programs for meals, transport, nursery, training, and others. The firm is currently operational in Spain and Portugal. However, the firm plans to expand its operations in more countries, including Mexico and other countries in Latin America and Southern Europe.

• In December 2022, Swageazy, an all-in-one enterprise gifting platform, also announced that the firm had raised INR 70 million as part of its Seed funding round, which was led by Info Edge Ventures. Amazon, Chargebee, Pidilite, LinkedIn, and Coursera, are some of its key customers. The firm is planning to use the December 2022 funding round to further expand its customer base, while also improving its product.

With the corporate gifting economy booming over the last few years, and the trend projected to further continue over the next three to four years, PayNXT360 expects more such global firms to raise venture capital and private equity funding. Furthermore, the competitive landscape is also expected to grow significantly, amid the entry of new players and expansion strategy adopted by well-funded firms.

On the consumer side, the demand for digital gift cards is also projected to grow significantly over the next five years. The shift to digital channels, along with the rising internet and smartphone penetration rate, are among the factors that will support the demand for digital gift cards. Consequently, PayNXT360 also expects more players to foray into the consumer-focused gift card segment from the short to medium-term perspective. This coupled with the trend of funding raising from venture capital and private equity firms will keep driving the competitive landscape and innovation in the global gift card market over the next three to four years.

To know more and gain a deeper understanding of the global gift card, click here.