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A new spin on the popular gift card.

Is the gift card, a surprisingly desirable commodity for gift recipients, in need of a version 2.0? The decades old plastic present, predated by its paper cousin the gift certificate, may be in for a young and hip transformation at the hands of new startup GiftRocket.

GiftRocket’s version of the gift card is place-specific, but not in the traditional sense. The format is designed to open up the $100 billion-per-year gift card industry and allow gift givers to send gift cards to anyone via email for any thing — such as drinks, skydiving or a spa day — at any venue, regardless of whether the retailer sells its own gift cards…

Here’s how it works: the giver picks a place in a specific region, as sourced from Yelp’s business listings, via the GiftRocket website. Let’s use Peet’s Coffee in Marina Del Rey as an example. The gift giver then builds the GiftRocket by filling out a few key details like amount ($20), recipient name (Scott) and email, and a personal message. Finally, the buyer pays for the gift with his credit card.

Our lucky recipient, Scott, is notified via email of his new gift. The next time he visits Peet’s, he can press “redeem” on his smartphone (no app required) to cash in his gift card. After verifying Scott’s exact whereabouts, GiftRocket will approve the request and automatically deposit $20 in Scott’s PayPal account. Scott’s next lattes are on the house, theoretically.

The GiftRocket format will likely feel funky for some — the model has its flaws, including the redeem now, reward later flow for recipients. Not everyone is ready to exchange instant freebies for PayPal deposits. Still, the just-launched startup, which presented Tuesday at Y Combinator’s Demo Day in Mountain View, California, is seeing some early traction.

“People have started using it,” co-founder Kapil Kale promises. “People use it for places that don’t have gift cards, when they can’t actually buy their friend a gift card to the little Mexican place down the street.”

The service is also proving easier to use for early adopters looking to send quick gifts at locales that already sell their own gift cards, Kale sales. “Give me an example?” I ask. “Chipotle,” he says. “People have bought so many gift cards to Chipotle, particularly the people in Y Combinator that have been using it.”

The GiftRocket concept may not be an apples-to-apples comparison to the gift card but, says Kale, the startup is more about helping users convey the message, “hey, this one is on me.”

Ironically, GiftRocket’s backstory is just as unique as its product. The startup now traffics in digital, location-based gift cards, but the original idea that Kale and co-founder Nick Baum pitched to Y Combinator founder Paul Graham was a referral service to help people discover new places. Six days before their interview — the interview alone being a major coup — the guys risked it all: they dropped the original referral idea and went with GiftRocket instead. When they did pitch Graham, they had nothing but the idea, a piece of a paper and part of an Android app to show.

The GiftRocket idea, which slightly overlaps with the likes of Gifi from Venmo, was big enough to win Graham over. Now, the founders have a chance to demonstrate that their fun gift card alternative can grow into a viable business.