Boomerang Pivoting Away From Gtrot to Launch a Social Gifting Service
Boomerang, a local gifting platform that enables Facebook users to give their friends vouchers for local services, today formally launched in its hometown of Chicago.
As part of the announcement, Boomerang has secured $1 million from Lightbank, the investment fund created by Groupon’s founders.
The concept behind Boomerang is not entirely new. It works similarly to Wrapp, which allows users to give gift cards to their friends through Facebook. Another similar company, Karma, was recently purchased by Facebook.
CEO and co-founder Zachary Smith says the primary difference between Wrapp and Boomerang is that while Wrapp is working with major chains, such as the Gap and H&M, Boomerang intends on working with smaller local merchants, and instead of strictly giving away gift cards, Boomerang will be selling vouchers for services, such as a meal for two or a kayak rental.
The challenge with that model is that it will have to build out a national salesforce to reach local merchants. Today, it’s launching with 40 Chicago businesses. Next up, it is hiring in New York and Austin, Texas, to launch in those markets soon.
Today’s launch is not the company’s first. It raised $800,000 back in February 2011 to launch a social travel recommendations site called Gtrot. Now it’s coming back around for its second go (and with a better name this time).
Smith said the idea for Boomerang came up while trying to figure out a way to monetize Gtrot. Going forward, the team is entirely focused on Boomerang, even though Gtrot is still attracting users. ”It’s still running on the side, and it continues to have 20,000 active users, but we see a huge opportunity in the social gifting and are focusing efforts on the new platform,” he said.