Open up your mind and say, ahh...

Looking for the newest hot tech company to back? You may want to pay attention. Reid Hoffman is not just LinkedIn‘s co-founder and executive chairman. He’s also one of Silicon Valley’s savviest investors, having gotten in on the latest boom’s hottest ventures. Facebook? Check. Groupon? Check. Zynga? Double check.

Which is why it’s worth paying attention when Hoffman (pictured) decides to toss cash at a new startup. Last fall we told you about Wrapp, the Stockholm-based “social gifting” company that’s the latest idea on how you distribute discounts digitally as a means of getting people into brick-and-mortar stores.

Today, Wrapp announces that Greylock Partners, the venture capital firm where Hoffman is a partner, is participating in a new round of funding in the company, with Hoffman taking a seat on Wrapp’s board. Co-leading the Series A is Atomico, the venture firm formed by Skype co-founder Niklas Zennström. The round’s $5 million will be used to fund an expansion of Wrapp, down into Europe and onto U.S. shores.

Wrapp joins Groupon and Coupons.com among the shopping-related investments Hoffman has made. But Hoffman, who has a particular interest in big data, tells Fast Company he sees the potential for new insights once a service like Wrapp gets to scale, insights that can lead to ideas for new products.

“You can see which aspirational brands people are most interested in,” he says. “What do people like to give? What are the triggers and events that lead to gift-giving?”

A recap of how Wrapp works: The service allows you to send gift cards to other people. The cards usually involve a certain amount of free money, like $5 or $10. The system syncs with Facebook, so when you want to send a gift, you select the recipient from your list of friends, and the service tells you what cards that person is eligible for. (Retailers can limit their cards to people who meet certain demographic criteria, like “women aged 20 to 30″ or “men 35 to 50″.)  You can add more money to the card (like $30 to a $10 card to a women’s boutique). And since you can publish the gift to Facebook, other friends can click on the status update and add money to the card, in the case of a friend’s birthday, for example. (That’s the “social” part of “social gifting.”)

The service went live in Sweden in mid-November, and so far, the results appear promising. Almost 400,000 cards have been sent so far, with a quarter of a million in December alone. (Wrapp co-founder and CEO Hjalmer Winbladh tells Fast Company there would have been more, but most retailers’ inventories got tapped out.) Two percent of Swedish Facebook users are Wrapp users, and usage is growing 30 percent every week.

What consumers like about the service is clear: Free cash and an easy way to send a gift to a friend. (It all happens electronically.) What retailers like about it is the ability to target exactly the type of consumer they want to get in the door.

A side benefit for retailers is free advertising. The use of the cards in Sweden has produced about 250,000 postings on Facebook–along with about 150,000 Likes–Winbladh says, which translates into about 3.3 million views.

Another pleasant surprise for retailers has been that average purchase amounts per customer haven’t gone down. In the Deals business, some merchants have complained that people using Groupon-type discounts sometimes only spend the amount of the voucher, no more, which defeats the purpose of issuing discounts as a loss leader. Winbladh says that the average amount being spent by customers who enter a store in with a Wrapp discount has remained consistent with what they would have bought otherwise.

Winbladh chalks that up to Wrapp’s targeting mechanism. “Stores can target people with high receipt sizes,” he says. “They can avoid kids 13-18 years old who would just go into Best Buy and use their card to buy a packet of batteries.”

Something else Wrapp has seen since its launch is that people are using Wrapp cards for more than just conventional gift-giving occasions. Users are sending them as thank you’s for a dinner party or for babysitting. “Instead of writing ‘thank you’ on someone’s Wall in Facebook, they’re doing it through Wrapp,” Winbladh says.

Winbladh attributes that to the ease with which a user can send a Wrapp card. And both Winbladh and Hoffman expect that the ease factor will accelrate the social aspect of the service as well (which Wrapp is waiting to turn on until it gets a critical mass of users). When being able to give someone a gift is as easy as shooting them an IM, both men say they think people will happily toss money into gifts started by others, the same way that today, people who wouldn’t necessarily have gone out to buy someone a birthday card now happily send wishes via Facebook, because of the ease involved.

Winbladh says Wrapp plans to expand to the U.S. in the first quarter of this year. They are also ramping up in Europe with plans to launch in the UK in a month.

Images: Fickr user jayneandd, Greylock Partners

Dorothy Parker said, “I hate writing. I like having written.” I know many people who are like that about their business, their trade. I know many more people who love to fantasize about what life will be like when they make it, but they like to skip over the part with the hard work, or they give it a sentence or two.

Here’s a hint: the work part is what brings the money part.

Google isn’t the only unorthodox player moving into the offline payments space. PayPal, like the search giant and Visa, is planning to launch a “Wallet” product that aims to replace traditional credit cards at registers.

“If someone had told me ten years ago that PayPal would be doing offline payments, I would have laughed,” said Laura Chambers, PayPal senior director of customer experience, at a showcase for the new PayPal Wallet Wednesday. “but it’s no longer going to be about online or offline commerce, ecommerce, m-commerce. It’s just going to be about commerce.”

PayPal Wallet, which is set to start rolling out within the next 12 months, is like its competitors’ counterparts in many ways. It allows users to pay from multiple accounts, store and use gift cards, access special offers and store receipts. Its biggest distinction is that it is not attached to NFC, and therefore not restricted to use on NFC-enabled phones. Users can pay at PayPal-enabled terminals using a PayPal credit card, typing in a PayPal pin or eventually by using an NFC-enabled tap.

This gives PayPal a huge immediate advantage. In order to use PayPal Wallet, users don’t need to own NFC-enabled phones — which very few of them do. Meanwhile, partner merchants only need a software upgrade to their terminals in order to begin accepting PayPal, not the hardware upgrade they would need to accept mobile tap-and-go payments.

Mobile payments enabled by NFC, however, still have the advantage of allowing consumers to choose which payment method to use before tapping a payment terminal. When they’re swiping a PayPal card or entering a pin, they can’t easily switch between gift cards or multiple accounts in the same way the Google Wallet allows users to swipe through their cards before paying. Technically, PayPal customers could adjust their default settings using the PayPal Wallet mobile app before swiping the card, but that will most certainly make the service less convenient.

In order to make up for this drawback, PayPal made an interesting move: It allowed customers to change their method of payment after they make a purchase. A user could pay for something using a Mastercard, take it home, and then later log in to his or her PayPal account to switch the payment method to Visa instead without any additional fee. Paypal is also offering a payment plan for expensive items at select merchants to some of its users. The merchants get paid immediately, but if the customer choses, they can pay PayPal in several payments.

Though PayPal is not the first payment company to use the word, it was possibly the first to truly be a digital wallet. The service was built on the capability to use multiple payment sources — credit cards, checking accounts and other loyalty cards — from one account. In fact, the company sued Google and two of its former executives shortly after the announcement of Google Wallet over trade secrets.

Even so, PayPal is not known for its exploits beyond payments. And like many payment companies, it has recognized that enticing customers to switch to a new form of payment is going to be about much more than payments.

“Swiping a credit card is a pretty good experience,” Chambers says. “A tap isn’t much easier than a swipe.”

In order to create deals and in-store integration features that it hopes will entice consumers to abandon their credit cards in favor of the PayPal Wallet, its parent company eBay has acquired several companies.

Where, which eBay acquired in April, holds a patent for a technology called geofencing that enables PayPal’s new wallet to alert customers when there are offers near them. When walking past a favorite coffee shop, for instance, a customer might get a push notification with a discount on coffee. In order for a merchant to send an alert, the recipient needs to add it to a white list (in other words, PayPal is not going to scare customers by blasting them with offers from surrounding merchants).

A related deals feature allows users to compile a wishlist of products. Their white list of companies can offer them deals on the item. If they’re compiling a grocery list, for instance, they’ll be alerted of the coupons available for the items on that list when they enter a vendor that accepts PayPal payments.

Two other recent eBay acquisitions, barcode-scanning price comparison app Redlaser and local shopping search engine Milo, are evident in a PayPal Wallet feature that allows customers to scan an item in a store in order to purchase it from that particular store.

The app also works as a loyalty card. Similar to the Starbucks card that PayPal powers, merchants can chose to reward customers who accumulate points for purchases and checkins.

With its loyalty points, offers and checkins, PayPal Wallet has not only moved into the competitive offline territory of credit card companies, but also into those of checkin apps like Foursquare and deals platforms like Groupon.

“In the offline world,” Chambers says, “if we just changed transactions, I don’t think anybody would take it up.”

Social gifting startup Sincerely, makers of Postagram and PopBooth, is bringing its popular mobile postcard making, printing and shipping features to an iPhone app you already love.

Sincerely is launching Ship, an iOS Library and SDK, as a plug-and-play software kit that developers can use to turn their iPhone photo apps into mobile printing studios.

“The printed photo is the world’s simplest but most ubiquitously appreciated gift,” Sincerely CEO and cofounder Matt Brezina says. “This extends our platform to a much broader user base. Right now, we have two apps in the App Store, tomorrow will have 14 … a couple months from now will have 100 apps in the App Store that are all exposing the Sincerely experience.”

More than a dozen launch partners will feature Sincerely’s print and ship technology in their iPhone apps, starting Thursday. Partners include Lonely Planet, Path, Pic Collage, Waddle, Quiption, Picsicle, Filtermania, Ship Mate, Interlacer, Pregnancy Progress, I’m Awesome and Color Effects.

At launch, Sincerely will continue to hand select app partners and evaluate interested parties on a case-by-case basis, Brezina says. The startup has already fielded inquiries from more than 200 developers, he adds.

App makers will earn 70% of revenue earned from the sale of each postcard above $0.99. Sincerely prices its postcards at $0.99 a pop, a fee that includes printing and shipping costs to anywhere in the world. App makers can keep the $0.99 price point in tact or price postcards higher to make a profit on sales through their apps.

Coincidentally, Sincerely’s SDK release comes just two days after Apple announced that it would enter the greeting card business with Cards, an iPhone application for creating, printing and sending greeting cards.

Brezina sees the Cards app as a competitor, but does not view it as a substantial threat to Sincerely’s business. In part because, he asserts, gifting is not Apple’s core business focus.

“I don’t think it’s a new direction for Apple,” he says. “I don’t think they’re going to make an amazing gifting experience or offer amazing products like Postagram…I think it’s kind of a checkbox for them.”

Meanwhile, Sincerely will forge ahead with what Brezina believes to be the best mobile gifting experience available. He points to Postagram’s high ratings on the App Store and Android Marketplace, and its appearance in a series of Apple ads as proof. Brezina would not disclose the size of the company’s user base or the number of postcards that have been purchased via Sincerely apps.

“We believe very strongly that a printed photo is this gift that every person on the street would appreciate,” Brezina says.

The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark. If you would like to have your startup considered for inclusion, please see the details here.

Name: uME

Quick Pitch: Use uME digital business cards to exchange contact information, add contacts to your social networks and remember them later.

Genius Idea: Create and exchange digital business cards for your multiple personalities.

uME, an iPhone app launched two weeks ago from startup ID2, attempts to innovate by making its product accessible to a more mainstream, low-tech audience.

“uME is about simplifying card exchange and rapidly getting connected,” ID2 CEO Jeff Axup says of his self-funded startup, which is run by a five-person team based in San Diego.

“We are about replacing paper cards and making connection info digital and automatically updated. Our service works 100% of the time and doesn’t require both parties to install the app or be a techie,” he adds.

uME iTunes link in its current state offers iPhone users a fast and easy way to create custom digital business cards for multiple identities or occasions. (An Android application is still a few months away.)

It’s not wholly original in purpose, but Axup sees the application as best-suited for technophobes looking to abandon paper cards.

As a uME user, you can send along the digital business card replica of your choice to new contacts — with an accompanying note and attached geo-location tag — via Twitter or email, view your sent and received card history, electronically scan the cards of other uME users, add uME card codes to your printed business cards and eventually design your cards to your liking (as is, you can choose from a few stock designs).

The application has merit and a few features even us technophiles and social media mavens can appreciate. Still, we think uME needs a bit more oomph if it’s going to successfully go up against successful veteran startups already working to solve physical-to-digital contact exchange.

The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark, a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. There are no upfront costs, so if your business is privately owned, less than three years old, and generates less than U.S.$1 million in annual revenue, you can sign up today.