Read the original story in the Portland Business Journal here.
Summary: PSU Business Accelerator graduate Giftango grows and creates new jobs in Portland, Ore.
Giftango Corp., a seven-year-old Portland startup specializing in digital gift cards, on Tuesday announced it is being acquired by one of the gift card industry's biggest players, Atlanta-based InComm.
Terms of the deal weren't disclosed, though Giftango CEO David Nelsen said his long-term goal in selling the company is to eventually make it — and its Portland workforce of 55 — significantly larger.
Giftango, which debuted in 2005, makes it easier for customers of major retailers to deliver digital gift cards via e-mail, mobile devices or through Facebook. It has worked with 150 different brands, including major retailers such as Amazon.com, Lowe's, Papa John's, and Barnes & Noble, among others. The company also has operations in Australia and Dublin, Ireland.
The company has attracted $9 million from investors across two rounds — $6.5 million in equity, $2.5 million in debt — and was on the verge of completing a $15 million Series C round when the InComm acquisition option arose.
“It was a very good exit,” said Nelsen. “It’s a sizable deal. It was a positive return for our investors.”
Those investors, which includes the Oregon Angel Fund, are expected to receive close to 10 times their initial investment as a result of the sale, Nelsen said.
Yet Nelsen promises this exit for investors isn't the end of Giftango's growth.
With InComm, it becomes a wholly owned subsidiary of one of the world's biggest distributors of pre-paid gift cards. Its products support 225,000 different retail locations and 1,500 employees in 70 countries.
By acquiring Giftango, InComm is strengthening is position in the digital gifting market. Nelsen said Giftango is the market leader in having the most national merchants.
“This acquisition opens doors to new and meaningful distribution channels for InComm merchants and product partners," InComm CEO Brooks Smith said in a news release. "Giftango is the digital gifting technology behind very large loyalty, incentive and mobile platforms in the US market and has made inroads internationally as well."
Nelsen said Giftango will continue to build out its business in Portland for the prepaid portion of InComm’s business. The deal won’t bring any changes in personnel, and the company plans to hire between 5 and 10 additional people immediately.
“We do exactly as we were doing before. Our goal is to bring a lot of new jobs to Portland and continue to build out digital,” Nelsen said. “If people believe digital is the next thing in payments, then we should be able to bring a lot of jobs to Portland.”