This article was originally posted as part of a startup spotlight on the Innovate78 blog.
A few years ago, entrepreneur Michael Smallwood became frustrated with all the plastic cards in his physical wallet. “Cards get lost, they’re hard to manage, or you’re stuck with a card you don’t want. Plus who wants another piece of plastic to carry around?,” he thought.
Having built successful businesses in the mobile software space, Smallwood recognized there was a clear disconnect between all the other financial services companies – like Acorns for saving, Robinhood for share trading, and even Venmo for money transfers – and that of a gift card industry that is still mostly based on physical plastic.
And so, Bitmo was born.
“With the growth of mobile payment systems like Apple Pay and Google Pay in the US, as well as market research that shows as many as 78% of millennials want an entirely mobile experience, we knew there was a clear opportunity for Bitmo to replace the old plastic gift card,” Smallwood said.
Below, we take a look at how this Carlsbad-based fintech startup plans to disrupt the $160 billion gift card industry while shifting consumers from plastic to digital gifts.
Year Launched: 2017
Digital Deets: Often described as the ‘Venmo for gift cards,’ Bitmo is a mobile platform that allows consumers to gift easily and securely right from their mobile wallet. Unlike plastic gift cards, Bitmo is highly flexible and allows users the ability to exchange gift cards from one brand to another and even split the value between multiple brands for free.”
One-of-a-Kind: Smallwood said Bitmo is unique in several ways. “First, of course, we’re entirely mobile – meaning you can conveniently send a gift of value to anyone as easily as a text message, while your recipient can manage and spend it right from their phone at over 130 Nationwide retailers. Because it’s so convenient, we believe Bitmo opens new opportunities to gift friends, family, and even colleagues and service providers when the old plastic card would be too much effort or just, frankly, too tacky.”
Success: So far, Bitmo has had more than 100,000 gifts sent through its platform, and the app is on track to surpass 1 million users by the end of 2019, growing 28 percent month over month.
“The key to our success has been an incredible team building and marketing a product that is really resonating with our consumers,” Smallwood said. “Bitmo is constantly expanding its gift catalog to include more retailers – many of which currently love our ability to help drive customers into their stores. Because of their strong support, we’ve been able to incentivize our most active Bitmo users to do what they already love – sending everyday gifts to friends and family. We even give users the ability to send their first gift to a friend on us without needing to add a payment method.”
Funding: Bitmo recently raised $3 million from investors. The startup plans to use the money to build its marketing, sales, product, finance, and engineering departments, Smallwood said.
Kudos: Bitmo was recently honored as a “Cool Company” in 2019 by the San Diego Venture Group.
Location Feels: Smallwood chose Carlsbad for Bitmo’s headquarters due to the coastal city’s location right off I-5, as well as proximity to the beach, and an available talent pool.
“We are also just down the street from GoPro, Walmart Labs, Verve and numerous other high-tech companies,” Smallwood said. “And being just 25 minutes to San Diego and 50 minutes to Orange County, we’re able to pull from an enormous talent pool, while still maintaining an incredible quality of life. Many of our employees live in Carlsbad and neighboring communities, including myself.”
The 78 Corridor Attraction: Smallwood said he has seen strong growth and a commitment to startups along the 78 Corridor over the last couple of years, which makes the region even more attractive to companies like his.
“North County continues to expand its talent pool and tap into resources previously commuting away from the area,” he said. “This centrally-located area with improved transportation options lets us draw upon an even larger talent pool within commuting distance of our office.”
Future Growth: Speaking of talent, Bitmo plans to double the number of full time employees to 30 over the next few months, hiring in all departments. “The hiring is a direct result of new business programs we’re putting together with our retail partners, including many major new deals we’ll be announcing in the coming months,” Smallwood said.
Editor’s Note: Innovation hub is an original FBT series celebrating the extraordinary companies that span across the entire San Diego region. From software to healthcare tech, retail tech, precision medicine, electronics, AI, fintech, cybersecurity, manufacturing and more, this series takes a deeper dive into the innovative industries that make up the collaborative culture of this diverse ecosystem.