WeGift, the U.K. startup that has developed a platform to let businesses easily issue e-gift cards and other digital rewards, has closed £4 million in Series A funding.
Leading the round is Stride.VC — the relatively new early-stage venture capital firm founded by Fred Destin and Harry Stebbings — alongside a number of other investors including including SAP.iO fund, Unilever Ventures, James Hind (founder of Carwow,) and Eamon Jubbawy (co-founder of Onfido).
The startup’s previous backers include Alex Chesterman, Charlie Songhurst, Simon Franks, Ascension Ventures, and Fuel Ventures.
“Currently payments are a one way street,” WeGift founder and CEO Aron Alexander tells TechCrunch. “Payments technology is built to enable businesses to take money from consumers but it doesn’t let businesses send money to consumers.
“We’ve created a new category of digital non-cash rewards to power customer acquisition, retention and loyalty globally: the ‘Twilio for e-gift cards'”.
Alexander says that historically businesses would offer a physical reward to power these use cases. For example, “open a bank account and get a free toaster (for my generation it was a free Filofax). In comparison, he says that e-gift cards are more appealing to consumers because they’re “easier to deliver than merchandise, they don’t get lost in the mail and they can spend it on what they want”.
There are upsides for the businesses handing out digital rewards, too. They include bulk percentage discounts when purchasing e-gift cards from retailers, and negating the need to ask for a customer’s bank account details. Most importantly, says Alexander, “you can track how they affect the customer journey”.
However, the problem with using e-gift cards at scale is that the technology infrastructure to automate orders and delivery is missing, meaning that it remains quite a manual process that often falls back on emails, CSV files and PDFs “This is what we are changing… [by automating] the issuing process of non-cash rewards,” explains the WeGift founder.
The resulting WeGift cloud-based platform offers an open API to enable businesses to automate sending digital rewards, on-demand and in real-time. “We give them instant access to a huge choice of rewards and payouts, an ever-growing network of more than 500 brand partners, across 26 markets and 20 currencies, in real-time,” adds Alexander.
Stride.VC’s Destin says digital rewards is a “messy, fragmented industry with broken processes, prone to errors and leakage, aged technology stacks and plenty of misalignment and distrust between the players”. It is also an industry dominated in the U.S. by two incumbents with a legacy in the physical gift card space and therefore ripe for disruption.
“The business model is well understood,” writes Destin in a Medium post. “Think Stripe, applied to non-cash payouts. Robust APIs, real-time capabilities, disruptive pricing, transparency”.
Meanwhile, WeGift says the Series A will enable the company to deliver on its vision of create “the world’s first” real-time infrastructure for digital rewards and incentives. Specifically, the funding will be used to further scale WeGift’s operations, support expansion to the U.S, and to continue investing in its technology platform.