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The Johannesburg-based startup’s online shop and wedding registry service allows couples to source various gifts — including both products and experiences such as travel trips.
Speaking to Ventureburn last week, Wrapistry CEO Jed Shein, 28, said R2.25-million would be invested upfront by each investor, in return for a 10% stake in the company for each investor. The remainder would be invested upon the achievement by the startup of certain targets in return for a further five-percent stake each.
So far the three-year old company has assisted over 200 couples and has at present 60 on its books. The aim, said Shein, is to get 1000 customers signed up.
I thought long and hard about taking this business to the next level, says Wrapistry CEO
The funding from Anuva Investments originated from former Dimension Data CEO Brett Dawson, who invested in the Section 12J VC company, Shein said.
The company was started at the end of 2014 by Shein’s mother Linda and Shein’s future mother-in-law, Pat Berman. Shein joined the two last year, after leaving his corporate job as a chartered accountant to help grow the startup.
“I thought long and hard about taking this business to the next level. Martin (Levick) of Genesis Capital had always been a mentor and liked (my) passion and the fact that I’d left my job and he introduced me to Brett Dawson,” said Shein.
The online shop presently has 3000 gifts — with 80% of sales having come from selling wedding gifts, while the remainder has come from other gifts such as gifts for baby showers.
Shein said up till now the three have bootstrapped the business. Initially, he said, none of them knew anything about ecommerce but opted to learn along the way, by listening to what customers.
While the startup does not hold any inventory itself, orders for those gifts requested are sourced from various retails companies and delivered by a local logistics company.
A new option, introduced by the startup a month ago, allows couples the option of having the company manage a bank account on their behalf into which guests can pay monetary contributions.
*Editors note: Wrapistry CEO Jed Shein subsequently contacted Ventureburn in an email and by telephone to dispute the figure of “1000 customers” that he initially said the startup aims to sign up. In an email on 24 November 2017 he did not reveal what the figure should be, saying only that they aim to “get thousands of couples to sign up and discover the benefits of using Wrapistry”.
In addition Shein says Wrapistry takes a 2,95% bank service fee on the cash funds contributed. “We do not manage their bank account” he says.
A lawyer claiming to represent Shein contacted Ventureburn on 24 November to request that the amount and percentage in equity taken, be removed. This, after the information was initially offered up by Shein to Ventureburn when the publication asked for these details. Ventureburn has taken the decision to retain the figures.
Furthermore in an email Shein had initially claimed that “the deal has not come though yet and we kindly request the article be removed as this will be prejudicial to the deal”. However in a subsequent email he said they “have signed the deal”.