Ahead Of US Launch, Wrapp Opens Its SoMo Gift Card App For Business In The UK

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With $10.5 million in funding behind it, Wrapp, an app that lets users buy gift cards from a variety of retailers and send them on as presents, is now launching in the UK as both an Android and Apple app, its first step beyond Sweden in an international strategy that will also see the company come to the U.S. later this year.

To kick off the service, the app is offering gift cards from a variety of top UK retailers — a sign not only of how these shops believe enough in the product to give it a try, but a mark of where the app’s creators are looking to pitch the business longer term. The list includes ASOS; the retail group Aurora Fashions (which includes high street fixtures Coast, Oasis; Warehouse and Karen Millen); and the gym chain Fitness First.

Wrapp only launched in mid-November 2011 in Sweden but in that time it has seen some impressive growth, with 150,000 consumers buying nearly 1 million gift cards since opening for business.

Although many retailers have moved into offering their own mobile apps to drive sales, Wrapp believes it fills a hole in the market for aggregating all of these together in the area of gift cards: “Most retailers have their own apps, but they also like to be grouped with others for visibility, just as they like to be on high street and in shopping malls,” says Hjalmar Winbladh, a co-founder and CEO of the company.

And similar to Shopkick, the point of the app for those retailers is to actually drive more sales in the brick-and-mortar environment. But there are also signs of how Wrapp is not just about bricks-and-mortar plays: also included in today’s launch list is iSubscriber, covering magazine and newspaper subscriptions for 2,000 titles, as well as the language learning software Rosetta Stone and Theater Tokens, which lets users buy tokens to exchange for theater tickets at some 240 different venues.

But there is also a limit to how far this will go. Winbladh notes that Wrapp has no intention of taking any steps into becoming a kind of mobile wallet, managing the shopping experience on behalf of others. Indeed, that is a space that has become increasingly crowded with many other players, too.

The UK is a fitting first international market for the company: the country already has a £4.5 billion industry in gift cards, which already account for 12 percent of retail sales, according to the UK Gift Card & Voucher Association. It also helps that the UK has a very big smartphone (and iPhone) market, with more than 50 percent penetration.

And that’s because at the moment, to gift or use a gift card with Wrapp, you need either an iPhone or Android smartphone: to collect a gift card you click on the link sent to you in email, text message (SMS) or on your Facebook wall, which lets the user automatically download the Wrapp app. To use the card, you select the card you want to redeem, and then show the resulting barcode to the cashier, which then gets scanned to complete the transaction. You can see how eventually this app could be extended to work on non-smartphone devices, too.

Wrapp is worth watching not just because it is tapping into a service, gift cards, that has yet to be really disrupted, but also because of its impressive list of founders and backers. Winbladh is known as a serial entrepreneur in Sweden, and this is his fourth startup. The first, SendIT, was sold to Microsoft in 1999 for $128 million. He also founded the VoIP giant Rebtel.

Other founders include Andreas Ehn, an early CTO of Spotify; Carl Fritjofsson, strategy advisor to Groupon.se; Aage Reerslev, founder of mobile browser Squace; and Fabian Mansson, former CEO of H&M and Eddie Bauer, who now serves as Wrapp’s chairman. (That also begs the question of when H&M might join the Wrapp party: Winbladh laughed mysteriously when I mentioned this to him on the phone, so it may be that we’ll see that announcement come up soon enough. That would be a big boost for the company, given how popular H&M is in its home country of Sweden, the UK and the U.S.)

Investors, meanwhile, are also an illustrious bunch: they include Greylock Partners and Atomico, the VC firm formed by Niklas Zennström, co-founder of Skype, KaZaa and other companies, and Creandum. As part of the most recent round from January, Greylock partner and LinkedIn co-founder Reid Hoffman joined Zennström, and Creandum partner Johan Brenner on Wrapp’s board of directors.

While Windbladh would not say what the rest of the company’s plans might be in terms of its international expansion, the languages listed as supported by the app in its App Store view could point some way to an indicator of where it might be expanding next: they include, in addition to English, Chinese, Dutch, French, German, Romanian, Russian and Spanish.