SA-born startup acquired by US payments firm

·31 Jul 2014

Gyft, a virtual gift card provider co-founded by SA-born entrepreneur Vinny Lingham, has been acquired by payments firm, First Data.

Gyft was co-founded in 2012 by South African entrepreneurs Lingham and Mark Levitt, and operates out of San Francisco, USA, as a gift card platform for businesses to offer reward and loyalty programmes.

The company’s mobile wallet is accessible through its website and as a free app on iPhone and Android devices, and has more than 200 of the most recognised retailers on its digital gift card platform.

As rationale for the purchase, First Data pointed to its own research which shows that electronic gift card sales grew 71% from 2012 to 2013, with the overall virtual and mobile cards business “gaining share rapidly in the near-$100 billion U.S. gift card market”.

“As a part of First Data’s suite of innovation-powered products, Gyft will be added to a portfolio of technology-driven gift solutions that link advanced consumer-engagement technology with point-of-sale business solutions,” said Lingham of the move.

According to Pando.com, the acquisition was valued between $54 million and $100 million, and had apparently been in the works for two months, growing from a previous deal between Gyft and Clover, another First Data company.

Gyft had raised $7.5 million in funding prior to the acquisition, according to TechCrunch, though the AngelList indicates an amount of $6.25 million raised.

“We don’t see this as an exit. We see this as a continuation of what we’re already doing, but with a lot more resources,” Lingham told Pando in an interview.

“We feel like we’ve won the space by focusing 100% on gift cards, while too many mobile wallets tried to go too horizontal. As a result, we nailed the customer experience,” Lingham said.

The company will reportedly continue to operate as a standalone brand while its 18-person team will stay intact, working out of the company’s current San Francisco office.

Lingham previously established the free website building service, Yola, which he founded in 2007.