Business Blog: Gift cards go crypto

Exclusive: Raise nets $63 million in round led by Haun Ventures to build a crypto platform for gift cards

February 26, 2025

When George Bousis founded his gift card startup Raise in 2013, the CEO didn't anticipate that he would work with the Secret Service. "We saw the really ugly side of gift cards that not a lot of people talk about," he told Fortune.

Chinese organized crime rings, for example, have stolen or altered gift card numbers to drain hundreds of millions of dollars from Americans, reported ProPublica in April. And Maryland recently passed a bill in June to counter fraud that mandates secure packaging for gift cards.

Bousis believes blockchain technology can help retailers tamp down on gift card fraud, as well as simplify a decades-old payments system. And he's investing what he said will eventually amount to more than $100 million to build what he calls "Smart Cards."

To fund Raise's crypto expansion, Bousis announced that his company had netted $63 million in a strategic round, Fortune can exclusively report. Haun Ventures led the fundraise. Other investors include Paper Ventures, Selini Capital, GSR as well as Raj Gokal, the cofounder of the blockchain Solana.

Bousis declined to say at what valuation his company raised. He did say it wasn't less than his startup's Series D valuation, which put his company at $675 million, according to PitchBook. The raise was a mix of primary and secondary share sales as well as token warrants (basically, when a crypto startup promises VCs a tranche of a yet-to-be-released cryptocurrency).

Raise also installed a new board. There are former crypto executives Marco Santori, the former chief legal officer at crypto exchange Kraken, and Bjorn Wagner, former CEO of Parity Technologies, the firm behind the blockchain Polkadot. And Raise also appointed George Ruan, cofounder and former CEO of Honey, as well as Matt Maloney, founder and former CEO of GrubHub.

"It’s really betting the house on what we think is really the future," Bousis said. "And we think the time is now."

The CEO didn't drum up $63 million for a crypto bet because his gift card company was cash poor. More than a decade old, the business is making a profit, he said. (He declined to say how much.)

In 2013, Bousis, two years after earning an undergraduate business degree, noticed that gift cards were flooding the market but consumers had no place to sell them. So, he launched an exchange where users can trade discounted cards for Fortune 500 brands like Airbnb, Walmart, and Instacart. Raise has facilitated more than $5 billion in gift card purchases and sales on its platform since.

The gift card industry, like many payments infrastructures, is a jumble of overlapping companies. There are money processors, card manufacturers and distributors, issuing banks, and compliance companies.

When his startup first launched, Bousis thought blockchains, or decentralized databases that no one controls, could eliminate the middlemen. "I was exploring tokenizing gift cards in 2014 really early on," he said.

He realized it was impossible to issue blockchain-based gift cards in the 2010s, but he kept tabs on the crypto industry. In 2022, he decided that the technology had improved to the point where he was ready to make the leap.

Over the next two-and-a-half years, his company invested about $25 million from its own profits and balance sheet into building out a blockchain platform, he said.

Consumers buy gift cards from participating retailers, and the money is deposited with Raise, which then uses stablecoins, or cryptocurrency pegged to the U.S. dollar, to put that money in escrow for a retailer. Once a customer uses the gift card, Raise sends money from the escrow account to the retailer by ACH or stablecoin. The current payments process is subject to changing regulation, Bousis said.

He argued that this system, which he will eventually decentralize through a nonprofit and a cryptocurrency, is cheaper than the current payments infrastructure for gift cards. And with records issued on a permanent database no one controls, it's more secure and fraud-proof, he claims. Raise will only issue digital, not physical, gift cards for the time being.

Retailers are interested, Bousis said. While he wouldn't disclose which ones, he did say he was working with Fortune 500 companies and the "biggest brands."

"This has been a decade in the making," he added.

ICYMI: Fortune's Jeremy Kahn published a deep-dive Tuesday looking at how OpenAI has quietly changed how it builds its flagship GPT models. After years of preaching a bigger-is-better approach that calls for pre-training AI models with ever more data (the G in GPT stands. for “pre-trained”), OpenAI has had to revise its playbook in order to get GPT-5 out the door. It may seem like an academic distinction, but it’s an admission that a key advantage of OpenAI’s (on which investors have bet nearly $20 billion) is no longer producing a big enough performance boost. Read the full story here.

See you tomorrow,

Ben Weiss
X:@bdanweiss
Email: benjamin.weiss@fortune.com

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VENTURE DEALS

- Eikon Therapeutics, a Hayward, Calif.-based drug discovery biotech, raised $350.7 million in Series D funding. Lux Capital led the round and was joined by Alexandria Venture Investments, The Column Group, Foresite Capital, and General Catalyst.

- Quantum Machines, a Tel Aviv-based quantum control solutions provider, raised $170 million in Series C funding. PSG Equity led the round and was joined by Intel Capital, Red Dot Capital Partners, and existing investors.

- Bridgetown Research, a Seattle-based business research AI agents developer, raised $19 million in Series A funding. Lightspeed and Accel led the round and were joined by others.

- Edera, a Seattle-based workload isolation technology developer, raised $15 million in Series A funding. M12 led the round and was joined by Mantis VC, IQT, existing investors Eniac Ventures, 645 Ventures, FPV Ventures, and others.

- Lovable, a Stockholm-based AI-powered full-stack engineer developer, raised $15 million in pre-Series A funding. Creandum led the round and was joined by angel investors.

- Flanks, a Barcelona-based wealth management platform, raised €14 million ($14.7 million) in funding. Motive Ventures led the round and was joined by Battery Ventures and existing investors Earlybird, JME Ventures, and 4Founders Capital.

- Goose, a Chicago-based operating system developer for pet care providers, raised $13.4 million in seed funding from B Capital, First Round Capital, The 81 Collection, and others.

- Magdrive, an Oxfordshire, England-based satellite propulsion technology developer, raised $10.5 million in seed funding. VC Redalpine led the round and was joined by Balerion, Founders Fund, Alumni Ventures, and others.

- Paradox Immunotherapeutics, a Toronto-based protein misfolding diseases therapies developer, raised $10 million in funding from SymBiosis.

- Actual Veggies, a Miami-based veggie burger brand, raised $7 million in Series A funding. Relentless Consumer Partners led the round and was joined by New Fare Partners, Todd Lachman, and Ben Rawitz.

- Adaptive Insurance, an Austin-based AI-powered climate insurance solutions provider, raised $5 million in seed funding. Congruent Ventures led the round and was joined by Montauk Climate, Generation Space, and others.

- Henry AI, a New York City-based AI-powered commercial real estate analyst, raised $4.3 million in seed funding. Susa Ventures and 1Sharpe Ventures led the round and were joined by RXR, Arden Venture Arms, Singularity Capital, and others.

- Vidyut, a Karnataka, India-based electric vehicle ownership platform, raised $2.5 million in funding from Flourish Ventures.

- LangWatch, an Amsterdam-based LLM monitoring platform, raised €1 million ($1.1 million) in pre-seed funding. Passion Capital led the round and was joined by Volta Ventures and Antler.

PRIVATE EQUITY

- B&R Auto, a portfolio company of Highview Capital, acquired Highway 64 Truck and Auto Salvage, a Farmington, N.M.-based truck and auto parts provider. Financial terms were not disclosed.

- GI Partners and TA Associates acquired a majority stake in Egnyte, a Mountain View, Calif.-based content collaboration and governance platform. Financial terms were not disclosed.

- Seven Point Equity Partners acquired Frazier Aviation, a San Fernando, Calif.-based aftermarket military aircraft sustainment solutions provider. Financial terms were not disclosed.

- UpSwell, a portfolio company of Clearview Capital, acquired Taradel, a Glen Allen, Va.-based marketing solutions provider. Financial terms were not disclosed.

EXITS

- Centric Software agreed to acquire a majority stake in Contentserv, a Munich-based product information and experience software provider and subsidiary of Dassault Systèmes, from Investcorp for an enterprise value of €220 million ($231.3 million).

- LongRange Capital agreed to acquire US Synthetic, an Orem, Utah-based polycrystalline diamond technologies provider for the energy, mining, and industrial sectors, from ChampionX. Financial terms were not disclosed.

- Nordic Capital acquired Anaqua, a Boston-based IP management solutions provider, from Astorg. Financial terms were not disclosed.

OTHER

- Redwood Services acquired a majority stake in Hope Plumbing, an Indianapolis-based plumbing services company. Financial terms were not disclosed.

PEOPLE

- Genstar Capital, a San Francisco-based private equity firm, promoted Scott Niehaus and Sid Ramakrishnan to managing director and Conor Flemming and Michael Waller to principal.