This story was corrected at 3:05 p.m., May 19, 2011, to state that CashStar competes with Pleasanton, Calif.-based Blackhawk Network and Atlanta-based InComm.

PORTLAND – David Douglas Stone’s eyes light up when he discusses the growth of his Portland-based tech company CashStar Inc.

“We are catching this technology wave,” said the 54-year-old CEO while standing in a conference room at CashStar’s Portland headquarters. “There is only one direction (we) can go.”

Since founded in late 2008, CashStar, which operates digital gift card programs for major retailers, has grown to 50 staffers and landed national retail clients. In the next two years, Stone plans to triple CashStar’s workforce to meet the surging growth of the digital gift card industry.

Stone, dressed in jeans and a loose-fitting button down, declined to disclose CashStar’s yearly revenue, but said the company grew 1,000 percent in 2010 and 400 percent so far this year.

CashStar’s clients include chains like The Home Depot, Chili’s, CVS, Staples, The Container Store and movie theatre operator Regal Entertainment Group.

Each time Stone lands a new client, he comes bounding down the hall, ringing a brass bell in celebration.

“He’s a rabble rouser,” said Vice President of Marketing Kathleen Goodwin. “He keeps the team going.”

CashStar’s chain store clients sell electronic gift cards online through websites run by CashStar.

Consumers can custom-design electronic cards with videos, photographs and personalize messages. And they can chose to have their gift card delivered by email, text messages or Facebook post.

Stone said annual electronic gift card sales are roughly $1 billion to $1.5 billion annually, a fraction of the $91 billion gift card industry, which is still dominated by plastic cards.

“It’s a small number but it’s fast-growing,” he said, noting that industry-wide electronic gift card sales are increasing 300 to 400 percent yearly, cutting into sales of plastic cards.

That’s a promising trend because CashStar’s retail clients sell $6 billion in plastic gift cards annually.

“The industry is off to the races,” Stone said.

CashStar competes with a handful of West Coast tech firms, including San Diego-based Transaction Wireless; Portland, Oreg.-based Giftango Corp. and Pleasanton, Calif.-based Blackhawk Network. It also competes with Atlanta-based InComm.

Stone, a former American Express executive who helped create the Amex Gift Cheque program, co-founded CashStar three years ago with Steven Boal, CEO of Mountain View, Calif.-based digital coupon company

Stone said they started the company because the gift card business was stuck in the past, dominated by “antiquated” plastic cards.

“It was my vision and passion to create the next big company in Maine,” he said.

CashStar launched with $3 million from private investors and received more than $500,000 in so-called “conditional loans” from the Maine Technology Institute, which provides capital to companies with promising technology. Conditional loans require an equal match by the company must be paid back if the company is successful, said Betsy Biemann, MTI president.

Biemann called CashStar’s results impressive.

“They have already shown that they have some great traction in the marketplace and have been signing on some large customers,” she said.

And the company has created jobs with “significantly high wages” than those in many other sections, said Biemann.

“These are the kinds of companies that are important … because they generate high quality jobs across the state,” she said. “They are clearly very promising company and one that is …contributing to the Maine economy more broadly.”

Since it was founded, CashStar has received millions more in private funds, including a $5 million investment in January.

Stone said that money will fund larger office space and up to 100 new jobs in the next 18 to 24 months. Many of those positions will be for programmers and designers making $70,000 to $90,000 annually, he said.

“We want to pay well, and we compete with Boston (for staff),” he said, adding that the vast majority of the company’s employees come from the Portland area.

Stone said he’s proud of his company’s growth and the jobs he’s added during the economic downturn.

“It’s a tough economy. The best way to give back is to create jobs, because it gives back to the economy,” he said. 

Staff Writer Jonathan Hemmerdinger can be reached at 791-6316 or at:

[email protected]