If you thought gift cards didn’t have traction, think again. Israel-based Zeek announced a $9.5 million Series B funding round led by Scale-Up Venture Capital on Wednesday. That financing includes contributions from major players like Blumberg Capital and Qualcomm Ventures.
The company’s site and app sells gift cards to major brands, as well as resells unused or unwanted gift cards. Reselling would presumably put a dent in what Zeek‘s press release says is a staggering $100 billion in unused gift cards, up from an estimated $41 billion in unclaimed gift cards between 2005 and 2011.
“We have created a unique technology that supports very high scale trading within a safe and reliable environment,” claimed Zeek CEO and Co-founder Daniel Zelkind. “The funding will help further investment in innovation, technology and marketing.”
A report by CEB TowerGroup said gift card sales in 2015 topped $130 billion worldwide, up from 2014’s $124 billion, indicating just how popular the method is. Making that electronic seems to be an obvious next step for the industry. The same report indicated so-called “e-gifting,” or giving electronic gift cards, has grown steadily to $7.1 billion in 2015, up from $5.5 billion in 2014.
Alex Lazovsky, general partner at Scale-Up, made a lofty prediction in a press release about the company, saying, “We believe that Zeek will swiftly surpass $1 billion run-rate in branded currency transactions. Intimate understanding of consumer needs puts Zeek on track to become the next tech unicorn in Europe.” If that is true, that would be about an eighth of the global online gift card industry, assuming the aforementioned 2015 numbers grow again this year. But CEB actually forecasts that gift cards will undergo a major digital shift and represent $18 billion of the market by 2018.
Claiming to be growing 30% every month, the business also brought in other investors that included FJ LABS (Fabrice Grinda), Chairman Uri Levine, Emery Capital, Ton Ventures, Radiant Venture Capital, iAngels and Target Global.
Zeek was founded in 2014 by CEO Daniel Zelkind, Itay Erel and Ziv Isaiah. Zeek will direct a chunk of the new round toward expansion in the UK market.