Behind every gift card you receive from friends or family, there are typically good intentions. Every restaurant or retail loyalty program is there to ensure you keep coming back. And, more often than not, there is a service provider which handles the financial logistics behind issuing and redeeming the cards.
One such provider is Tango Card, a Seattle-based company that provides a “RaaS (rewards as a service)” platform for businesses looking to reward employees, engage existing customers, and attract new customers.
Through its Reward Link, RaaS API, and Blast Rewards offerings, businesses can send their customers specific gift cards from the likes of iTunes and Amazon, let them pick their own gift cards through an online marketplace, receive virtual pre-paid debit cards, or make charitable donations.
According to a statement from the company, Tango Card has raised $35 million in growth equity from FTV Capital, a San Francisco-based private equity firm with $2.7 billion under management. The company plans to use this capital to invest in its three core businesses, as well as deliver new marketplace integrations, speed up international expansion, and increase headcount.
As part of the transaction, Chris Winship and Robert Anderson of FTV Capital will be joining Tango Card’s board of directors. But according to an SEC filing posted prior to the announcement, not all of that capital is going to the company. A portion of the fresh cash, $19 million to be exact, is wrapped up in what’s called an “exchange offer.”
It’s fairly common in late-stage deals for founders to sell part of their equity as part of the funding round. Similarly, if a company has outstanding convertible debt—which often converts to equity upon a future financing round—it may issue stock back to its creditors as part of the conversion process. For its part, a representative from Tango Card told Crunchbase News that FTV Capital “specifically instructed” the company not to disclose details of the exchange offer.
Before its growth equity deal, Tango Card raised approximately $9.78 million in equity funding from seed through its nearly $7 million Series B round, which was closed in two tranches between 2013 and 2014. In June 2017, Tango Card also raised $10 million in venture debt from Western Technology Investment, a firm that “specializes in offering acquisition financing to revenue generating firms,” according to Crunchbase.
Illustration: Li-Anne Dias