Reid Hoffman joins board, invests $5M in Wrapp
The LinkedIn co-founder brings firepower to Wrapp, a social gifting startup that's about to launch in the U.S.
Wrapp, a Stockholm-based startup that lets you send gift cards to friends on Facebook, today announced that LinkedIn co-founder has joined its board.
This comes as Wrapp said that it has raised $5 million from Greylock Partners, where Hoffman is a partner.
Wrapp was founded early last year by a team that includes the former CTO of Spotify and the founder of Rebtel, the world's largest independent VoIP company. In September, it launched as a mobile app in Sweden, where it it soon became the top social app.
Wrapp is working with more than 25 top merchants in Sweden and is on track to launch in the U.S. and the U.K. this quarter. It plans to add additional markets worldwide later on.
Here's how it works: a merchant decides what type of gift card it wants to offer along with the demographics they want to target. Then, when a user wants to send a gift card, she opens the Wrapp app, chooses the Facebook friend she wants to send it to, and Wrapp offers up a selection of gift cards that should fit that person.
The person who receives the gift needs only to open the App on her phone in order to redeem it. Wrapp, meantime, takes a cut out of the total redemption amount only after the card is used. If the card isn't used, the company gets nothing, eliminating the risk for the merchant.
Sweden has been the perfect test market, and Wrapp is on a tear. The company says that Wrapp was used to send 250,000 digital gift cards in December alone, and that 2 percent of all Swedes are active users. More than 90 percent of the country, which has a population of 9 million, are on Facebook.
Wrapp says it's most active givers and redeemers are women 22 to 35 years old.