Wrapp to Open Up Its New Group-Gifting Service in the U.S

The company’s co-rounder and CEO Hjalmar Winbladh before helped start Sendit, a mobile Internet company purchased by Microsoft and at the time later co-founded Rebtel, a mobile VoIP (Voice over Internet Protocol) company. As well participating is Andreas Ehn, the founding CTO of music phenom Spotify, and Carl Fritjofsson, an advisor to Groupon.se.

$100 billion business in the U.S.

“Gift cards are a $100 billion business in the U.S., and it has not had that many innovations,” Winbladh said. “It went from a piece of paper with manual logs to a piece of plastic in other words integrated with the cash register. It’s on the whole a physical product.”

This is how Wrapp works: Download the app to either an iPhone or Android phone; login to your Facebook account; click on a friend, who might be celebrating a birthday or anniversary; pick from one of the gift cards available, which can be targeted based on the intended recipient and contribute as much money as you want.

The business model it is proposing to retailers is that Wrapp doesn’t get paid until someone redeems the gift card. At the time if someone uses it, Wrapp collects a commission on both what the retailer’s contributed to the card and what others contributed beyond that.

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