Two years ago, with two successful tech startups already under his belt, South African entrepreneur Vinny Lingham founded a the digital gift card company Gyft. According to Lingham, he launched Gyft because he believed mobile payments were the next big thing. His hunch was proved right when Gyft was recently sold for over $50 million to America’s largest credit card processing company, First Data.
Last year Gyft raised $6 million in funding from investors including Google Ventures, and was featured on the highly influential Ellen Degeneres Show. But how did this South African-born entrepreneur find such success abroad
The startup king
Lingham studied for a B.Com (Information Systems) degree at the University of Cape Town, but says his entrepreneurial blood “saved him” from graduation in his final year of studies. His startup journey then began on his first visit to California’s tech hub, Silicon Valley, in 2002. “It wasn’t a very appealing place to be – the market was dead, and not much exciting was happening. But after Google’s acquisition of YouTube in 2006, energy returned to the valley,” Lingham says.
Thereafter, Lingham started Yola in San Francisco in 2007, a business offering free website building and hosting for SMEs, which today has seven million users. This led him to make his official move to Silicon Valley. “Other people try and start businesses with a very shallow knowledge of the field that they’re in, and it’s difficult to teach someone else if you don’t know how to do it yourself. “So I spent many years building up my knowledge and developed insight into how Google’s algorithms work, and we were able to use that to our advantage,” he says.
Ambition often comes with sacrifice In 2012 he resigned as Yola’s CEO to start Gyft, which he launched in California where the startup is currently based. “Ambition often comes with sacrifice.”
Proudly South African
Lingham, now 35, has been living in the US for just over five years with his wife Charlene, but says he has maintained strong South African ties. Five years ago he co-founded the Silicon Cape Initiative, South Africa’s answer to Silicon Valley in the US, with local entrepreneur Justin Stanford.
Silicon Cape Initiative is their attempt at developing the Western Cape as a tech hub. “We did not expect it to grow to the level it has, and I’m thrilled that the community has taken it to the level it is at right now,” Lingham says. Lingham is also the recipient of numerous awards, including Top Young ICT Entrepreneur in Africa (2006) and ICT Personality of the Year in South Africa (2008)
He also previously founded Clicks2Customers, which also won the Top Technology Company award in South Africa in 2006, for it’s search engine marketing software and services.
The digital gift card industry
The Gyft platform is accessible on PCs through the Gyft website and is also available as free app on iPhone and Android devices. The platform boasts over 200 recognised retailers. Customers manage their digital gift cards through a Gyft app for smartphones or an online account.
The platform allows customers to buy, send and redeem gift cards from their smartphone to merchants; in June this year, Gyft added an option to allow customers to pay for their purchases in the online currency Bitcoin.
Gyft interface on a smartphone[/caption] Although gift cards aren’t very popular in South Africa, they are huge in the US. The market is worth about $100 billion annually. This popularity is what First Data, which recently acquired the startup, is banking on.
In a statement following the acquisition, First Data says it acquired Gyft to enable consumers to buy, send, manage and redeem gift cards using mobile devices. This is after looking at its own research which shows that electronic gift card sales grew 71% from 2012 to 2013.
About Gyft’s possible arrival on South African shores, Lingham says it might be a promising market for digital gift cards, and anticipates it entering “in the not too distant future”.