How Raise, which has raised a total of US$220 million in funding, enters the crypto consumption track in traditional gift card platforms
Reprinted from panewslab
02/28/2025·2M
Author: Weilin, PANews
On February 26, according to Fortune, crypto gift card platform Raise announced that it had completed a US$63 million strategic financing, led by Haun Ventures, and Raj Gokal, co-founder of Paper Ventures, Selini Capital, GSR and blockchain Solana, participated. Although the company did not disclose the valuation of this round of financing, the amount of financing and the background of investors attracted attention.
This round of financing has brought Raise's total financing of more than $220 million, with previous investments from Accel, Paypal and New Enterprise Associates (NEA).
Entering Web3 from a traditional gift card trading platform
Raise was founded in 2013 and was founded by George Bousis. At that time, Bousis, who had just graduated from college, noticed that gift cards were rampant in the U.S. market, but consumers had no place to sell them. So he launched a platform that allows users to trade discounted gift cards, involving Fortune 500 brands such as Airbnb, Walmart and Instacart. Since then, Raise has contributed to more than $5 billion in gift card purchases and sales on its platform.
In his opinion, the gift card industry, like many payment infrastructure, has a mess of overlapping many companies, such as fund handling companies, card manufacturers and distributors, card issuing banks and compliance companies.
However, as blockchain technology matures, Bousis realizes that blockchain can bring deeper changes to the gift card industry - not only eliminate intermediaries and reduce transaction costs, but also improve transaction security and prevent gift card fraud.
Currently, Raise has three products: Raise App, API Solution and Gift Card Trading Market.
“I started exploring tokenizing gift cards very early in 2014,” he said. He realized it was impossible to issue a blockchain-based gift card in the 2010s, but he has been focusing on the crypto industry. By 2022, he believes that technology has developed to a sufficiently mature level to be ready for this change. He said that over the next two and a half years, the company's investment was about $25 million, and that money came from the company's profits and balance sheet to build a blockchain platform.
George Bousis believes blockchain technology can simplify the payment system that gift cards have been available for decades. He said he would eventually invest more than $100 million to build what he calls a "smart card."
Has partnered with the Polkadot Community Foundation to support crypto
wallets
Unlike the habits of Asian countries, gift cards become almost a "necessary" for American consumers every year during the holiday season, and they often go beyond popular items such as AirPods, PlayStation or popular vinyl albums to become the first choice for holiday gifts. According to market data, about 40% of consumers spend on holidays to buy gift cards. This gift card popularity is not only because of their convenience and flexibility, but also because they can meet the needs of both the giver and the recipient.
After purchasing a gift card, consumers usually redeem it within six months, and the redemption rate exceeds 70%. However, gift cards usage will drop over time. Research shows that by one year, less than 80% of gift cards are redeemed.
In Raise's crypto gift card process, consumers purchase gift cards from participating retailers and deposit funds into Raise, which then uses stablecoins to escrow the funds for the retailer. Once a customer uses a gift card, Raise transfers funds from the escrow account to the retailer via ACH, an electronic payment network in the United States, or a stablecoin. Bousis said the current payment process is affected by changing regulations.
Bousis believes that this system (will eventually be decentralized through a nonprofit and cryptocurrency) is cheaper than the current gift card payment infrastructure. Moreover, since records are stored in a permanent database that is uncontrolled, this promises to make the system safer and fraud-proof. Currently, Raise will only issue digital gift cards, not physical gift cards.
Currently, Raise has expanded to the blockchain payment industry through its cooperation with the Polkadot Community Foundation (PCF) and plans to integrate into the DOT Wallet. In addition, through its cooperation with WalletConnect, the company has added support for digital wallets such as MetaMask, Phantom, and Coinbase Wallet in August 2024.
Bousis said retailers are interested. While he did not disclose which retailers it was, he said he was working with Fortune 500 companies and "the biggest brands."
With the announcement of financing news, Raise welcomes a new board member. The board members include Marco Santori, a former crypto industry executive, former chief legal officer of crypto exchange Kraken, and Bjorn Wagner, who was formerly CEO of Parity Technologies, the company behind the Polkadot blockchain. In addition, Raise has appointed George Ruan, co-founder and former CEO of Honey, and Matt Maloney, founder and former CEO of GrubHub.
Bousis declined to disclose the company's valuation at the time of financing. He said the financing valuation would not be lower than the startup's valuation during its Series D financing, with PitchBook data showing that it was valued at $675 million at the time. The financing includes primary and secondary equity sales and token subscription rights (crypto startups promised a portion of cryptocurrency that has not been released yet). He also said that the $63 million raised through crypto investment is not because Rasie faces a shortage of funds, and that Raise, which has operated for more than a decade, is currently profitable. The payment process in the gift card industry may usher in a change. In the future, with strong financing support and extensive retailer cooperation, Raise may bring a new growth catalyst to the Web3 consumer track.
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