Karma, a new social, mobile gifting service from the founder of TapJoy, has raised funding from Kleiner Perkins, Sequoia Capital, The Obvious Corporation, Stephen Gillett, Felicis Ventures and other angel investors. While Karma declined to reveal the exact amount of the funding round, which was raised last summer, SEC documents reveal the startup has raised around $4.5 million. In addition to announcing its investors, Karma is also debuting its disruptive mobile, social gifting platform that could change the way people give and receive gifts.
Founded by Lee Linden, and Ben Lewis; Karma aims to give users the option to give friends gifts on the go via iOS and Android apps. While there are a number of mobile, social gifting apps on the market, Karma’s service combines intelligence, social discovery, and the ease of gift giving in a sleek app that’s definitely worth a look.
Here’s how it works. Once you open the app and connect via Facebook, Karma will actually sift through your news feed, birthday reminders and more data from your friends to find all the occasions that could possibly be worthy of a gift, note, or thoughtful message. Karma will get rid of all the noise and highlight those important moments in your friends’ lives you might not want to miss. For example, Karma will break down occasions by birthdays, new jobs, engagements, weddings, birth announcements, condolences and more. Linden tells me the startup built a semantic analysis engine on top of Facebook to highlight the most important moments in your friends’ lives.
Once you choose a friend who you’d like to give a gift to, you can choose an actual gift from a selection of goods from over 50 product companies, including Magnolia Cupcakes, 23andme, Crane & Co., Domaine Chandon, Gund, Jawbone, Kate Spade, Macmillan Publishing, Moleskin, MOMA Design, Movie Tickets.com, Netflix, Pandora, Spotify, and others. So you could send a friend a dozen cupcakes or could send someone a ride to the airport in an Uber, or simply send them a bottle of champagne.
You then choose an animated card and message to attach to the gift, and a method of delivery of the gift notice. Because you may not know your friend’s physical mailing address (or may not want to type this in your phone, Karma lets you send the notice of the gift to a friend’s phone via text, post a message on Facebook, or email the notification of the gift to the friend. When the recipient accepts the gift and sees the message, he or she can specify where they would like the gift to be sent.
In terms of payment, you don’t necessarily have to pay right away. In fact, Karma says that users don’t have to pay until the recipient accepts the gift and it is shipped. Once that happens, Karma will allow you to enter your credit card info via the web or mobile, which will be saved for all future purchases. You can also schedule delivery of a gift for a certain time frame as well.
On the recipient side, he or she will receive a card via email, text or Facebook and will be able to open it in an HTML5 optimized web interface. The recipient enters the address the gift should be sent to or can actually choose to exchange the gift or even donate the gift’s value to a charity. Recipients can also write a thank you note (sent via email, text or Facebook update) to the gift giver. Each product/gift comes gift wrapped as well.
As Linden and Lewis explain, they thought of the idea because they lived far from family in Michigan and felt they missed important moments in the lives of their families. Posting on a Facebook wall or sending a text just seemed impersonal and the duo wanted to figure out a way to make gift-giving more simple and social while not sacrificing convenience.
So far, in closed beta, Karma has sent several thousand gifts already and have had positive responses from recipients and gift givers.
The company also has major talent on its side. Prior to Karma Science, Lee co-founded mobile app distribution platform Tapjoy, which was acquired by Offerpal Media. He’s also worked as an associate at Kleiner Perkins, at Microsoft, and was the co-founder of Y Combinator startup ContestMachine. Other employees (20 in total) hail from Amazon, Google, Kraft, Microsoft, Nestle, OpenFeint, Palm, Skype, and TripIt.
After seeing Karma in action, it’s clear that the startup and its founders are onto something big. And clearly investors agree as well. Not only is the app sleek and incredibly easy to use, but it really does seem to simplify the act of remembering those important moments in friends lives while also simplifying the gift giving process. You can tell that Linden and Lewis have been very thoughtful about how the user experience can be optimized specifically for the gift giving process (i.e. not requiring payments right away which Linden says has increased conversion rates tremendously).
There are a number of other players in the mobile gift giving space, including Wrapp, so Karma will definitely face competition. But the app’s ease of use and sleek user experience should be able to create a loyal following.