CashStar CEO David Stone says recent research shows “consumers want eGifts to be easily available on their smartphones, personalized and instant.”
CashStar, a Portland-based company that specializes in digital gift cards, got $5 million in funding from Intel Capital and others Wednesday, bringing its total funding to $33 million.
CashStar said the latest financing will help it continue to add employees, improve its mobile product offerings and expand internationally. The company has 80 employees, up from 40 a year ago.
The company offers electronic gift cards for more than 250 brands including Best Buy, Gap, Staples, Starbucks, The Home Depot and Williams-Sonoma. CashStar already has expanded into Canada and plans to launch its eGift products in the United Kingdom and Hong Kong soon.
"We know from recent research that consumers want eGifts to be easily available on their smartphones, personalized and instant," said Chief Executive Office David Stone. "Consumers want to send a gift in any amount to anyone at anytime. Borders are irrelevant."
With an eGift, a customer can log into the website of a retailer or CashStar and choose an electronic gift card. The electronic card is sent through email to the recipient, who can redeem the card at the retailer's store or website. CashStar said the eGift card market is expected to be worth $11 billion by 2014.
CashStar declined to disclose its revenues or profits, but said transaction volume in the first quarter of 2012 was up 200 percent from a year ago.
"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," said Dave Flanagan, managing director of Intel Capital.
CashStar's efforts to expand and improve its mobile retail services will help meet the growing demand for those offerings, analysts said.
About 91 percent of U.S. retailers had mobile services or strategies in mid-2011, up from 74 percent in 2010, according to a report in January by Forrester Research. About 56 percent of online shoppers who own mobile devices use them to research or buy products, Forrester said.
CashStar's latest funding came from Intel Capital, along with existing investors Passport Capital, FTV Capital and Steven Boal, co-founder and chairman of CashStar and president and chief executive officer of Coupons.com Inc.
Stone declined to comment on the potential for an initial public offering of the company.
"When you focus on growing the business, those things tend to take care of themselves. Now the priority is giving consumers the best experience and growing the business," Stone said.
He said the biggest competition for CashStar is retailers that launch their own eGifting products, such as L.L. Bean.
CashStar expects to expand its employee base in Portland, and add workers on the West Coast to be near companies such as Google, Apple and PayPal. Still, Stone sees Maine becoming a hub in the payments field, with companies such as CashStar and South Portland-based Wright Express, a credit-card transaction processor, as leaders in the fast-growing sector.
"There's probably 3,000 to 5,000 people in Maine focused on payments. There's incredible talent in risk, payments, processing and engineering, and customer care. It's an emerging secret -- we're making Maine a mini-digital thought leadership hub," Stone said.
CashStar will host a retail conference today in Portland with companies such as Apple, Groupon, Starbucks and Walmart to discuss how retailers are using eGifts and how mobile payments and social media will play a role in the growth of retail and digital marketing.
Staff Writer Jessica Hall can be contacted at 791-6316 or at firstname.lastname@example.orgTweet