Entrepreneur raises millions for prepaid gift cards linking young consumers,

Entrepreneur raises millions for prepaid gift cards linking young consumers, retailers


Friday, May 23, 2008
Nashville Business Journal – by Cynthia Yeldell Nashville Business Journal

Ed Braswell is incorporating texting, social networking and
electronic couponing into a youth-oriented gift card company with plans
for a nationwide launch.


Todd Stringer, Nashville Business Journal

Facecard CEO Ed Braswell

The former Link2Gov Corp. president’s new company — edo Interactive — is rolling out Facecard, the first of several prepaid gift card brands.

The company received its first round of $1.5 million in capital from Claritas Capital and Voyent Partners last year.

Next week, edo Interactive expects an additional round of $5
million in capital to aid in the nationwide product launch, Braswell
says.

"I have been in payments for the last 10 years and I felt there was
a nice market niche in Generation Y," Braswell says. "It’s a market
that’s been ignored by traditional banking services."

Facecard differs from a typical gift card in two important ways.

It allows users to create an online profile, like MySpace, that
will allow their friends or relatives to add money to their cards, and
can even tip them off to special occasions such as birthdays.

Edo Interactive also serves as a marketing tool for merchants who
can use the card to offer "prewards" or electronic coupons on the
cards.

For example, a retailer can send a text message to a targeted group
of users offering to add $2 to their cards if they redeem the reward in
a certain time frame.

Facecard secured a partnership with MasterCard and the cards are
accepted at all locations that accept MasterCard, Braswell says.

Investor John Chadwick, managing partner of Claritas Capital, says
Braswell has a track record of success in the field of payments and
technology.

Braswell was head of payment processing company Link2Gov when it sold to Milwaukee-based Metavante Corp. in 2005 for an undisclosed amount.

"Facecard has the potential to be a billion-dollar company and we
don’t see that a lot," Chadwick says. "There is a lot to be excited
about."

According to research firm TowerGroup,
spending on U.S. gift cards is expected to be just around $94 billion
in 2008, a slight drop from 2007 because of the softening economy.

However, gift card purchases are expected to rebound and exceed $100 billion by 2010.

TowerGroup Senior Analyst Brian Riley says more than 85 percent of consumers in their teens to age 21 have used gift cards.

"Younger people tend to use them aggressively and tend to be the biggest recipients," Riley says.

He says the cards would be an effective marketing tool that will
allow stores to target specific clients and save advertising dollars.

That’s exactly why Melissa Hall, general manager of Noshville
restaurant, says her company is using Facecard. It can target users by
age, gender, Zip code and purchase behavior.

Hall says the cards will allow the restaurant to track which customers are dining with them.

"It’s going to be beneficial for our Broadway location with the college kids," Hall says.

Edo Interactive plans to license its idea and launch other card brands targeting different groups by the end of the year.


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