Clovis-based Plastic Jungle -- which buys, trades and sells gift cards -- has landed a $4.8 million investment from four Silicon Valley venture-capital firms.
The investment is a coup for Plastic Jungle as it comes in the middle of a recession and because central San Joaquin Valley startups sometimes struggle to nail down deals with venture-capital firms based in other parts of the state.
Regardless of the challenges, at least one investor said Plastic Jungle has the ability to leap far ahead of its few competitors.
"Our belief is that Plastic Jungle has the potential to be the leading branded platform for finding value for your gift cards or buying gift cards at a discount," said Tod Francis, managing director of Menlo Park-based Shasta Ventures.
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His firm and Bay Partners, First Round Capital and Harrison Metal combined to provide the investment and receive shares of the company. Francis and Josh Kopelman of First Round Capital will join Plastic Jungle's board of directors.
The company will use the money to finance its growth.
It will hire more employees -- it won't say how many -- and add more products and features to its Web site. The site will be rebuilt and redesigned to make it easier to use, said founder and chief operating officer Tina Henson.
"It's helping move gift cards through more easily and getting the trapped cash out of the [unused] card," she said. "That's really all I can say about it so far."
And partnerships with retailers -- including possibly promoting Plastic Jungle on store Web sites -- might happen in the near future, said CEO Gary Briggs.
The announcement comes when many investors are scaling back due to the economy, said Tim Stearns, director of the Lyles Center for Innovation and Entrepreneurship at California State University, Fresno.
BusinessWeek reported this week that investments by venture capital firms fell 61% in the first quarter, to $3 billion, the lowest level since 1997.
Henson said Plastic Jungle executives met with 27 different venture capital firms.
Francis said that many firms adjust the pace of their investing based on the economic climate.
"We don't try to time the markets with our investing," he said of Shasta Ventures. "We try to invest in great concepts."
He wants to tap into the estimated $400 each household has in unused gift cards, he said.
Plastic Jungle's revenue growth -- income for March was double its highest month ever -- also helped attract investors, Henson said.
In addition to selling unwanted gift cards, more customers are using the site as a money-saving tool by buying gift cards at a discount for everyday expenses.
But the location of Plastic Jungle's headquarters in Clovis was a challenge, Henson said. Investors like to be close to their investment, and many venture-capital firms are outside the area, she said.
Francis said Brigg's presence helped assuage that concern. He works from an office in Campbell. Briggs joined Plastic Jungle earlier this year. He is eBay's former chief marketing officer and earned Brandweek's "Marketer of the Year" award in 2003.
"That provides comfort," Francis said. "He knows people."
His access to talent and technology is more important than location, he said.
More companies are overcoming the location problem, said Stearns of Fresno State.
"Anyone with a good idea is going to find an investor regardless of the economic times," he said. "This is a very solid company. Clearly you can see great potential for success."