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Ukrainian uGift, a gift-card service which was named as the “Best E-Commerce” service at the 2013 The Next Web Ukrainian Startup Awards, has recently obtained financial backing from the Happy Farm incubator and Angel investor Semyon Dukach and now prepares to scale. In order to find out more about the business, I spoke with founder and CEO Andriy Zhyvolovich, who told me about their service, their plans, funding, and more.
uGift is billed as a service which simplifies the process of giving and receiving gifts. There are online and offline aspects to the service as users have the option of mailing physical cards (perhaps in a gift box?) or sharing virtual cards by email, SMS, or Facebook. Cards are available directly through uGift online, through a uGift-developed plug-in on the websites of their partners, in physical stores operated by their partners, and in certain retail stores which sell a variety of uGift certificates. Zhyvolovich says that their goal is to offer cards for a variety of businesses and products, ranging from electronics to restaurants to wellness. On their website, I found that users can even offer gift-cards for hot-air balloon rides. There is a catalog which lists the various gift cards that they offer, broken down by recipient and type. Gift cards in many categories start at 9-10 Euro and customers can add postcards and flowers (ranging in price from thirty to over a hundred Euro).
As far as financial backing is concerned, Zhyvolovich tells me that they are supported by $70K (52,800 Euro) from Happy Farm and by $30K (22,600 Euro) from Dukach and that they are looking for further funding, with $200K (151,000 Euro) as the current target (and more information about their investors can be found on their AngelList profile). The startup plans to grow its client base, expand their geographic reach, and to further develop their plug-in for businesses.
According to Zhyvolovich, large e-commerce stores have little interest in gift cards and devote a correspondingly little amount of resources to this area. Thus, uGift believes that they have an opportunity to make an impact by developing a plug-in which offline businesses can use on the websites. In terms of traction, I am told that uGift currently has several thousand registered customers and more than 300 retail partners, including major domestic clients like Matrix and Foxtrot. Most private businesses do not offer information about revenue, but uGift was willing to share and Zhyvolovich tells me that they are currently earning about $10K (7,500 Euro) per month.
Competitors for uGift include domestic rivals like Bodo, DariYou, and Emozzi. Zhyvolovich says that the service that uGift provides stands apart because the aforementioned companies are a mixture of SEO optimization on a large set of keywords and a business model which includes selling high volume of gift certificates and he wants for uGift to disrupt the industry.
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