Social and mobile gifting service Treater raises $2.5 million

The funding announcement coincides with the company’s launch.

Amy Dusto

Social gifting service Treater, which allows users to send gift cards for items like cups of coffee, T-shirts or movie tickets to the mobile devices of their Facebook friends, has raised $2.5 million in seed funding, the company announced this week. The investment coincides with the service’s launch after six months of testing with a user group.

Treater users send ‘Treats’ to their Facebook friends by logging into the service, selecting a friend they’d like to send a gift to—Treater also makes suggestions based on friends’ life events and status updates—and which items to give.  Then they pay with a credit card or the leftover value of Treats they’ve been given in the past, which Treater stores in a ‘piggy bank’ for that reason. Treater sends the items as one-time redeemable gift cards via a Facebook post, e-mail or text message. Gifts arrive 15 to 20 seconds later.

The idea is to send a small, thoughtful item, such as a cocktail to a friend stuck in the airport, says Treater CEO Jeff Ross, rather than an impersonal, generic gift card. For that reason, the gift cards are only redeemable for the selected item. On receiving a Treat, a consumer can decide to exchange the item or re-gift it to another consumer, without the giver’s knowledge.

Givers may also add personal messages and photos to the gifts before sending, so that they “almost wrap their Treat with the thought that went into sending it,” Ross says. “We think that’s big, from a merchant’s standpoint—it’s very powerful to have someone trusted send you a personal gift.”

Merchants also benefit from the ability to promote the sales of certain items, which they configure with Treater, partake in the ever-growing mobile commerce channel, and garner attention on social networks when users share and comment on their gifts, he says. Treater declined to disclose a list of retail partners who signed on for the launch; searching the service reveals plenty of big retail names including Pier 1 Imports Inc.; American Apparel Inc., No. 287 in the Internet Retailer Top 500 Guide; Urban Outfitters Inc., No. 48; and World Market.

Retailers do not have to pay anything up front to offer items on Treater, but pay a fee when a recipient redeems a Treat, Ross says. Nor do retailers need to have a Facebook fan page to participate, he adds, but if they do, the service could be used for such promotions as Treat giveaways based on Likes, time or location.

For now, consumers can only send Treats from the Treater web site, but iPhone and Android apps are coming soon, Ross says. Treater will later work with Twitter, too, allowing users to send Treats to followers, he says. Eventually, he says, consumers will be able to send Treats to the contacts stored in the address books on their mobile phones. “Treater’s mobile capabilities let users instantly send a Treat at the very moment they are thinking of a friend,” he says. “Since we have a selection of Treats at different price points, it’s easy to send something thoughtful to a larger circle of friends.”

The new funds come from a mix of investors and have resulted in additions to Treater’s board of directors: Fred Schaufeld, managing director of SWaN Investments and founder and vice chairman of New Asurion Corporation; Jack Davies, founder and former president of AOL International; and Gene Riechers, former partner at Valhalla Partners.


American Apparel Inc., AOL International, e-commerce funding, Facebook, Fred Schaufeld, Gene Riechers, Jack Davies, Jeff Ross, m-commerce, Mobile, mobile commerce, mobile devices, Mobile marketing, New Asurion Corporation, Pier 1 imports inc., smartphones, social gifting, social marketing, SoMo, SWaN Investments, Treater, Twitter, urban outfitters inc., Valhalla Partners, World Market