eBay is buying Israeli startup The Gifts Project for over $20 million. The Israeli firm will become an eBay development center in Israel, and will form eBay's Israel Social Center and focus on building social shopping platforms and product features for eBay Marketplaces, said the Gifts Project.
The firm has developed a system that facilitates the group purchase of gifts. The application allows a number of people to join together to purchase a gift for a friend, or chip in a part of the price. It allows people to type in friends' names and link them to a specific event, such as a birthday, via the person's Facebook page - and then invite others to join in buying the gift - on eBay.
The company was founded by Ron Gura, who will head up the Social Center; Matan Bar, who will become project leader; Erez Dickman, the head of engineering; and Maya Gura.
The company has only eight employees, but says it will now be hiring more programmers. Its first investors were Yossi Vardi and Eyal Gura, Ron Gura's brother. The two invested NIS 100,000. Eyal Gura is the CEO and co-founder of PicApp and the co-founder of PicScout.
In October 2010 the company raised $1 million from the Gemini Israel Funds venture capital fund, and the European venture capital fund Index Ventures also invested. This represents an almost 20 times return on investment within a year.
eBay and the Gifts Project announced cooperative ventures in January of this year.
In August, the company was chosen by Wired Magazine as one of Israel's top startups, and devoted an article to the company.
"This has been a remarkable year for The Gifts Project, and we believe this is a big win. Not just for the team and our amazing investors, but also for the State of Israel," wrote management on the company's blog.
"Not only will eBay's immense network of buyers and sellers allow us to offer the benefits of social commerce to millions of people worldwide, it will also help us achieve our mission of getting people the gifts they really deserve, allowing friends and family to chip in for each other's gifts," said the Gifts Project.