GiftRocket, a graduate of this year’s Y Combinator spring class, launched behind a great idea. The startup wanted to marry gift carding with location-based services, so that friends could send gift cards to each other that could only be accessed once they “checked in” to a certain location. So, for example, if you really wanted your friend to try out the coffee at a certain local coffee shop, you could send them a gift card to that coffee joint, which they could only redeem from the shopt itself.
As Robin pointed out in March, the idea was a simplified version of Venmo’s Gifi, which basically had users combine Venmo and Foursquare apps to achieve the same effect. I say “was”, because GiftRocket is today moving away from the “check in” portion of their service to an even more simplified and universal approach to sending personalized gift cards.
Beginning today, GiftRocket users can send and receive digital gift cards via email or Facebook, using PayPal, a bank account transfer, or check. Basically, GiftRocket is now an easy P2P money donation service, as users can decide to send $50 to their mother for Mother’s Day, and in a personalized email say, “Mom here’s $50 for you to use at Barnes & Nobles”. GiftRocket doesn’t involve merchants directly, but GiftRocket Co-founder Kapil Kale tells me that he thinks this social pressure/proof element will assure that people use the virtualized gift cards in the way they were intended. And the best part? Their gift cards don’t expire.
If you send $50 to a friend or loved one, there’s no way to be positive they use the money at the intended location (Kale said that the check-in service they originally launched became too complicated and hamstrung certain interactions), but with loved ones sending you the money, you’ll be less likely to use it for something else. But, hey, you can always just email them back and ask.
GiftRocket is also launching two complementary tools (one today, one in the near future) to help beef up its service, including a feature that enables users to identify the true sale value of retailers’ physical gift cards. Obviously, depending on the merchant, gift cards are generally worth between 50 to 90 percent of their face value, the primary reason being that physical gift cards can often only be redeemed at a single, designated retailer — or they get lost or expire. (The reason why there is a strong secondary market for unused gift cards, of which there are an estimated $30 billion worth.) So the startup’s calculator will help you figure out what the value of your card is.
And the second, coming soon, is GiftRocket’s VIP Concierge service, which will recommend gift ideas for senders and recipients based on their preferences (and likely Facebook history in the future). Want to know where you should send your mother-in-law for her birthday dinner? GiftRocket can help.
As to how the startup is making money,it charges $1 + 5% of the gift amount. And, on that note, Kale also told us today that the startup has raised $500K in angel funding to help expand from their current team of three. GiftRocket has been boot-strapping in lean startup mode and is looking to hire, and Kale tells me that the company has been growing 70 percent month over month in terms of customers and sales.