News

Yahoo's Jerry Yang invests in gift card payment company

July 17, 2012

Yahoo co-founder Jerry Yang has invested in Openbucks, a gift card payment network, that recently announced the closing of a $4.8 million Series A round of funding. Other investors included Terry Semel, Greycroft Partners, BV Capital, Clearstone Ventures, Morado Ventures, Novel TMT Ventures, Inspiration Ventures, CrunchFund, SV Angel and TiE Angels. The investment will support Openbucks' strategic growth plans, including the continued development of its acceptance network, according to a company press release.

What is Openbucks?

Openbucks allows consumers who don't have credit cards or a bank account, or who prefer to keep their financial information private, to pay for online goods and services using gift cards from major retailers. The regular gift cards of Subway, CVS Pharmacy, Burger King, Shell, Circle-K and CITGO are now accepted through the Openbucks Network as a form of payment at thousands of online checkouts. This provides millions of unbanked and underbanked consumers, including teenagers, with a free, safe and convenient way to pay online using trusted brands, Marc Rochman, founder and CEO of Openbucks, said in the release.

"Consumers can obtain a gift card from one of our partner brands at over 100,000 locations nationwide, and use it to pay online in a way that is fast and safe, without any of the fees they would incur with the other prepaid cards currently available on the market," he said. "We also generate a mutually beneficial exchange of foot traffic between online and offline retailers. We are excited to have the support of a well-connected and relevant group of investors composed of successful entrepreneurs, industry leaders and prominent VC funds."

The platform, said Yang, taps into a whole new market of consumers who haven't been able to previously buy goods online.

"Openbucks stands at the forefront of the future of online payments as it provides a simple solution to the 25 percent of U.S. households and most U.S. teens, who have no or very limited access to credit cards along with the many consumers that are leery of providing their financial information online."

The company transforms analog money into digital money and has seen a fantastic adoption in the past 10 months since its launch at TechCrunch Disrupt less than a year ago, said Geva Solomonovich, CTO of Openbucks. "We are now preparing to scale up the network and bring millions of new customers to online commerce."

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