An online gifting technology platform is in the process of raising additional capital as it gears up to roll out its product across a range of online retailers in the first quarter of next year.
CleverGift, a solution that retailers will license for their online stores, hopes to raise €2 million in equity capital as it begins scaling up its offering having already signed retailers in the US, Britain and Ireland, its founder Kealan Lennon told The Irish Times.
The software allows consumers buy a gift for someone but where, traditionally, that selected gift would be sent immediately, the CleverGift platform allows the intended recipient go to the retailer’s website and choose the variant of the gift they want. For example, if a shirt is bought, the recipient of the gift can choose the size and colour.
The software is designed to avoid a major problem for online retailers – returns. Some 31 per cent of gifts are returned after Christmas, according to Mr Lennon. In the clothing sector, that figure rises to 75 per cent.
Mr Lennon said CleverGift also capitalises on the trend of people leaving shopping until the last minute.With his software, last-minute shopping is not a hindrance because the receiver of the gift is effectively responsible for its shipping. That means that gifts won’t arrive too early or too late.
"Let's face it. Who wants to face that queue into Blanchardstown Shopping Centre car park to wander round aimlessly instead of shopping on the couch on your iPad," Mr Lennon said.
"CleverGift is to online gifting what Stripe is to online payments," he added before detailing how the online gifting market is worth at least €1 trillion a year across Europe, Britain and the US.
“We believe that, based on that market size, we can get to €500 million [in revenues] as we roll out the technology to retailers over a five-year period,” he said. That ambition assumes only a small rate of take-up and Mr Lennon suggests revenues could far exceed that.
To date, CleverGift has generated $1 million (€847,000) with Sears, Vodafone, eBay and Brown Thomas.
CleverGift has raised over €8.5 million. One of its backers is technology venture capital firm Delta Partners, which has €250 million under management. And, in an interview with this newspaper in 2014, Dr Michael Smurfit noted that he was a backer of the group's parent company, Cleverbug.
The opportunity for the company lies in the fact that online retailing is significantly impacting traditional retailers, according to Mr Lennon. While his company doesn't plan to be added to Amazon. com's platform, it does aim to add "value to other retailers" by licensing its software to their websites.
The company has already had acquisition approaches and said an “exit is expected within a three to four-year time horizon by way of initial public offering or trade sale”.