Why we invested in WeGift
These are somewhat frenzied times in the venture space. Competition between funds to invest in promising companies has become extremely fierce, particularly when it comes to payment companies.
Here at CommerzVentures we always look for gems capable of reducing friction in simple but impressive ways. WeGift is one of those gems. It is an API-first B2B platform that lets businesses seamlessly issue programmable incentives and rewards for their customers and employees. After meeting them last year, we recently decided to invest.
The big picture
Unlike many sectors of the payment industry, the market for money transfers from organisations to private individuals is poorly served. With volume amounting to US $10.7 trillion in the US alone each year, B2C payouts are crippled by slow bank transfers, paper cheques, expensive card rails and manual processes. Businesses are not equipped to efficiently accommodate use cases such as rewards or incentive marketing.
A subset of that space, gift cards, amounts to $620bn in volume issued globally each year. About half of that sum is procured by businesses to reward/ incentivise employees and consumers. Yet the industry procuring gift cards is stuck in the slow, low-tech, physical gift card era. As a consequence, only about 25% of gift cards issued today are digital, despite the rising demand for digital solutions.
WeGift provides a sophisticated B2B marketplace connecting three different parties: businesses who want to issue and send gift cards to their employees and consumers; brands who sell gift cards to those businesses and gift card processors who issue gift cards.
WeGift is integrated today with dozens of issuer processors and more than 700 brands. It already boasts several high-profile customers such as Vodafone, E.On, Perkbox and Sodexo. The platform works in real-time, is flexible and simple to integrate through an API. It enables savings (via discounts and lower stocks) and process automation for businesses, and a frictionless experience for gift card recipients.
Not only do we see a great market opportunity and a great product offering, we are highly impressed by the WeGift leadership team. The company is led by its very ambitious, committed, and talented founder, Aron Alexander. Aron has assembled an exceptional management team that combines highly relevant domain and functional experience with remarkable entrepreneurial drive.
In line with Aron’s vision, we see WeGift becoming a dominant player in the non-cash pay-out space, beyond issuing rewards and incentives. The CommerzVentures team is therefore delighted to be accompanying WeGift on its exciting journey to what we believe will be a successful future.
