Ukrainian prepaid gift-card service uGift has attracted tens of thousands of subscribers since it launched in 2012. Now, the company moves to close a deal for a substantial amount of seed funding and sets its sights on international expansion. I spoke with CEO Andrey Zhivolovich to find out what the service is all about and where his business heading to.
Having been named Best E-commerce Startup at the Ukrainian TNW Awards in February 2013, uGift is billed as a gift-giving solution for retail and e-commerce merchants. The startup offers prepaid cards, real and virtual, for a range of activities and businesses (a complete catalog is available on their website).
Their website is fairly user-friendly, as visitors can sort through cards based on the service or business, the gender of the recipient, by type of activity, or by holidays. Users then having the option of having the card delivered in a simple package or may opt to have it delivered in a gift box or a fancy postcard.
uGift was initially funded by the startup’s founders, Zhivolovich and Ken Leaver, but later incubated at Happy Farm in Kiev and has since obtained $30K from angel investor Semyon Dukach and a $30K grant from the Global Technology Foundation. Having attracted a reported 10K email-subscribers and receiving 20K monthly unique visitors to their website, the company is ready to expand and Zhivolovich told me that they are currently closing a deal for $300K from an unnamed investor.
Notable domestic uGift customers include electronics-retailers Foxtrot and Comfy, restaurants Mirovaya Karta and Kozyrnaya Karta, and more. Offline, the startup has opened shops in more than 100 cities across Ukraine. Zhivolovich tells me that their business model is to sell their cards through shops, restaurants, and other businesses, to sell the cards through their own stands, and to allow dealers to use the uGift API to sell cards online.
In the United States, the prepaid gift-card industry is valued at more than $100 billion, but the Ukrainian market is not quite as saturated. As a result, uGift sees an opportunity to become the leader in their region. Zhivolovich says that they consider Edenred, Incomm, and Blackhawk Network to be their primary competition.