Wrapp is a Stockholm-based social gifting service and brand discovery tool for mobile consumers. The company has raised over $25M in funding since 2011, and competes in a variety of categories in the retail online to offline sector including coupons, social discovery, and local incentives. While there are a number of competitors in each category, Wrapp has a significant amount of funding and is backed by notable names such as Greylock Partners, Qualcomm Ventures, American Express, and Reid Hoffman. Wrapp has over 200 merchants using the platform with household names such as H&M, American Eagle, Office Depot, Victoria’s Secret, Sephora, and more.
The app has four main use cases for end-consumers (taken from their website):
I had a chance to chat with Lisa Enckell, VP of Marketing at Wrapp, who has been with the company for three years now. You can see a summary of our conversation below.
The founding story and management team:
Wrapp was founded in Stockholm, Sweden, in 2011 by a team of serial entrepreneurs – Andreas Ehn, Carl Fritjofsson, and Hjalmar Windbladh. The co-founders have years of experience and hail from various technology companies including Spotify, Rebtel, Stardoll, Groupon, and Soundcloud. They saw the success that Groupon was having back in 2010, but believed that the daily deals model was unsustainable for both merchants and consumers.
Wrapp’s value proposition and how the product works:
For consumers, Wrapp allows you to send free promotions and paid gift cards to friends as well as claim deals for yourself. At the point of redemption consumers simply open the app, click on the relevant deal, and Wrapp will generate a unique barcode or QR code that the merchant can scan into their system.
For merchants, Wrapp is a marketing tool that attracts new customers as well as engages existing customers. The company provides e-commerce style metrics for retailers to enable granular tracking, performance statistics, and return on investment metrics. Algorithms and data from social networks also enable better targeting capabilities and attribution tracking.
The business model:
Wrapp charges merchants purely on a performance basis, meaning there are no fees until the consumer makes a transaction – not even an initial setup fee. Once the promotion is redeemed, the company charges a fixed fee per use. In order to prevent merchants from abusing the free listing service, any promotions that are uploaded must be the best available deal – for example, a merchant cannot list a 30% off coupon on Wrapp then turn around and use it to drive traffic for a better 50% coupon in-stores.
Evolution of the company:
The company initially started with a tool that enabled friends to give birthday gifts via Facebook. Today, the tool has evolved into a mobile marketing and couponing platform. Going forward Wrapp hopes to move closer to the transaction and is currently beta testing a new product that, I presume, will be geared as another merchant tool. This new product is expected to launch in the US early November 2014.
The multi-national company has operations in both Sweden and the U.S. As of September 2014, Wrapp had over 3M total users between both countries with the breakdown as follows:
As a final thought, Wrapp has raised a solid amount of funding and it will be interesting to see what their latest product turns out to be. There is no shortage of contenders in the mobile promotions space, but as uptick is expected to increase significantly in the coming years, more merchants will be turning to startups that can operate across all segments of the customer journey. I’ll be sure to update this as soon as I hear back from them in November!