PORTLAND, Maine — EGift card innovator CashStar on Wednesday announced that it has attracted a new round of funding, adding $5 million to the $28 million in VC and private equity financing it had already raised.
The company was founded in 2008 and now has 80 employees, the majority in downtown Portland. This $5 million in funding comes from Intel Capital and from existing CashStar investors Passport Capital, FTV Capital and Steven Boal, co-founder and chairman of CashStar, and president and CEO of Coupons.com Inc.
David Stone, co-founder and CEO of CashStar, told the Bangor Daily News that the ongoing investment by Passport, FTV and Boal was important in that it showed their “continued faith and optimism for the category” of eGift cards.
The addition of Intel Capital was also vital, he said.
“It’s a very large, global brand that conjures a lot of respect,” he said. “They’re a hugely successful company in their own right, they have a global footprint in their investment portfolio, from Asia to Europe to North America. Having that brand gives us more credibility globally.”
That’s important as CashStar pushes into global markets, said Stone. The company already has Canadian clients, and is set to announce its first clients in the United Kingdom and Hong Kong, he said.
Stone said that in addition to helping enter new global markets, this latest investment will allow CashStar to invest in mobile eGifting – using smartphones, tablets and other devices as delivery systems for electronic gift cards. Cole said that when someone opens an eGift card now, 20 percent open it on a mobile device, as opposed to a laptop or desktop computer. That’s double the percentage from a year ago, and is indicative of the the trend toward people using phones as wallets.
“That’s a staggering number,” said Stone. “The evolution is moving very rapidly, in my vision, to a more mobile-centric digital platform. We’re seeing our customers increasingly receive and buy on mobile or tablet devices.”
The company will use this latest VC infusion to make eGifts an integral part of various mobile delivery systems and devices, Stone said.
Stone would not discuss whether CashStar, a privately held company, was profitable. He also didn’t discuss possible exit strategies, stressing that the company was in growth mode,
“This market is a growth market,” he said, “and it’s moving at light speed.”
More than 250 brands are partnering with CashStar for eGifting, including Best Buy, Chili’s Grill & Bar, CVS/pharmacy, Gap, Pottery Barn, QVC, Staples, Starbucks, T.G.I. Friday’s, The Home Depot, and Williams-Sonoma.
Stone started working on the CashStar idea in the attic of his Falmouth home. Today, the company is one of the few – if not only – companies in Maine that have continued to attract serious VC investment in a challenging economy.
“Gifting in the digital world offers new opportunities for businesses to take advantage of social and mobile platforms to reach and engage with consumers,” said Dave Flanagan, Managing Director of Intel Capital, in a Wednesday release. “The momentum CashStar has achieved in the past year alone is indicative of the transformation in how both businesses and consumers are approaching the gifting experience. CashStar’s innovations have digitized the act of gifting online and now this trend is increasingly moving mobile, making it a more personal, engaging and rewarding experience.”
Being a primary mover in the rapidly emerging and evolving space puts the company in a leading spot.
“It’s great for Maine – and great for our team and our investors,” said Stone.