Publisher & Editor, NJTechWeekly.com
|CardCash founders Elliot Bohm, CEO, and Marc Ackerman, COO. ||
CardCash, the Brick Township-based startup that operates as a gift-card exchange, has recently secured an additional $6 million in debt financing from Sterling National Bank (Montebello, N.Y.), and has entered into a partnership with Walmart.
The current round of funding comes on the heels of $6 million in equity financing from Guggenheim Partners, a global financial services firm, and a partnership with InComm, a provider of connectivity and integrated point-of-sale technology solutions to retailers.
Counting the funding from Sterling National Bank, CardCash has secured close to $15 million in financing over the past year.
Since Christmas day, users have been able to visit the Walmart CardCash website to exchange gift cards from more than 200 retailers, airlines, and restaurants for a Walmart card.
Recipients who exchange their unwanted gift cards through the CardCash website can receive a Walmart card worth up to 97% of the value of the original gift card. Walmart cards are one of the most sought-after cards in the CardCash gift-card exchange marketplace, according to a CardCash spokesman. And Walmart cards never expire.
Elliot Bohm, who cofounded CardCash in 2008 with Marc Ackerman, spoke to NJTechWeekly.com about both developments.
“The debt financing came in perfect timing for the holiday season. There is an influx of gift cards that are going to be coming through our doors post-holiday. We just needed to finance our inventory of gift cards.” And Sterling National Bank stepped up, he said.
It was no small feat “to get a national bank comfortable to lend against an inventory of gift cards,” he added.
Once they were able to get a national bank onboard, it was a “no-brainer” to take the money as debt financing, Bohm told NJTechWeekly.com. “We didn’t want to give away any more equity in our company.”
Walmart seemed like a perfect fit for the CardCash model, Bohm said. While it took several months of discussions to develop the alliance, “we saw ourselves as offering a product that they would go for.”
Walmart and CardCash will each derive advantages from the partnership. “In customer’s eyes, Walmart has almost a cash equivalent. You can buy almost anything at Walmart, from basic necessities to luxury items to gifts,” Bohm said. At the same time, “CardCash has much experience offering cash for gift cards.”
“When we wanted to power the exchange for a brand, Walmart seemed like a perfect fit.” Walmart, he explained, has a very large footprint and allows customers to use the gift cards both online and in stores.
The Walmart payout is higher than the cash payout at CardCash, he noted. For customers who want to receive cash, the company urges them to continue using CardCash’s website. “But customers who shop at Walmart, and that’s most of America, can take advantage of the higher payout.”
“We expected many customers to be very interested in this, and…I can tell you, it was received very, very positively.” The alliance has generated a great deal of traffic to the website, but the website is been able to handle the increased number of hits, Bohm told us.
The Walmart alliance has also created a big marketing wave in the media, he said. “The way the media is talking about it is definitely something very unique for us.”
Bohm talked a bit about the company’s growth in Brick Township, noting that the startup has more than 100 employees there and expects to grow further in 2015. “It’s a great place to work and we are definitely hiring,” he said. He added that the company has opened a small Silicon Valley office for business development.
In July, CardCash completed the acquisition of Plastic Jungle (San Mateo, Calif.), a company backed by more than $25 million in venture capital (investors included First Round Capital). As part of the deal, CardCash.com acquired Plastic Jungle's technology infrastructure, business partnerships and domain name, “PlasticJungle.com.”
Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article (with one small addition) originally appeared in NJTechWeekly, and is republished here with her permission.