Nashville-based edô Interactive has closed a $5 million Series A round of funding, with investment from venture-capital firms Claritas Capital and Clayton Associates. The raise brings to $6.5 million the total recruited by edô CEO Ed Braswell during the past 18 months.

Edô's investors are ultimately betting on 50-year-old Braswell (left), who previously spent nine years with Nashville-based Link2Gov.

At Link2Gov, Braswell became president and served until the tax-payments processor was sold to Metavante Corporation for $63 million. When sold, the company that Braswell joined as a startup was generating $45 million in annual revenue.

Edô recently began a trial-launch offering its online marketing platform for businesses that target young-adult consumers who use edo's prepaid debit- and gift-card products. Edô's platform allows client-marketers to offer cardholders electronic "preward" coupons that translate into discounts when cardholders buy the advertisers' goods or services. The system tracks the results of each marketing campaign.

Edô's opening act is the reloadable "Facecard," which is issued by Iowa-based Metabank in the form of a Prepaid MasterCard and a prepaid gift card. Cardholders as young as 13 may use Facecard to buy things, receive allowance, swap money with friends, and may monitor spending online or via cellphones. Adults sign for card-users under 18.

By the time of its formal launch next year, edô's platform may be deployed in support of marketers targeting demographic segments other than Gen Y, and could involve payroll-linked services.

"I think our timing is very fortunate," Braswell told VNC. He was alluding to the nation's growing recognition of the need to educate youth and adults about personal finance – particularly amid the current economic turmoil – as well teaching them about such things as penalties for overdrafting regular debit cards.

Even though Braswell believes edô has an edge in its gateway technology (patent application pending), it could soon get tougher to defend edô's foothold amid debiting Millenials. Recent market entries include Wal-Mart Stores' Student Money Card and the Visa Buxx prepaid card.

How's it going, so far? On Sept. 11, roughly 90 days after the launch of Facecard, The Wall Street Journal reported that Braswell said edô Interactive was adding an average 5,000 cardholders each month.

During an interview with VNC Oct. 1, Braswell declined to reveal current numbers of edô cardholders, preward volume or other financials. However, Braswell said he aims to have more than 250,000 cardholders by year's-end, and that edô card growth has been rising at a compounding rate of 140 percent, month over month.

Braswell is taking steps to secure edô's competitive position on the Gen Y beachhead. From the outset, for example, edo has worked to reach consumers through social-networking sites such as Facebook and MySpace.

Edô's steady surge of exposure in traditional media, blogs and other venues is no accident, either. The company has retained Charleston, S.C.-based Jim Dyke & Associates, the 39-year-old name-founder of which is a well known GOP operative who was communications director for the Republic National Committee during the tumultuous 2004 election cycle and who is credited with effectively using new-media tactics versus Democrats. A 2005 Campaigns & Elections story quoted Dyke saying his political experience produced "the unique experience I have using creative Internet strategies to drive other media."

In 2004, a Washington Post story on Dyke's decision to relocate from D.C. to Charleston noted that Dyke had plans to create a coalition aimed at 25- to 45-year-olds and christened "SaveMyInvestment." Dyke's SaveMyInvestment seems to have been shelved, but today Braswell points folks toward conceptually similar "GetSmartGetMore." The currently minimal site is aimed at young adults and provides tips on budgeting, banking and identity protection, as well as a direct link to Facecard.

Partnerships are also key. One of edô's first partnerships was with ULoop, the Nashville-based campus marketing company. Braswell told VNC, "We use ULoop for online advertising on some West Coast campuses. We get brand awareness, card adoption and viral messaging to ULoop campuses. ULoop is paid for advertising space on their site [plus] success fees from card growth." Facecard is being promoted on about 50 campuses, this fall.

There are other tactics: In June, edô joined 80,000 fearless fans at Bonnaroo, the music and arts festival at Manchester. There, edô donated $10,000 to charities, and offered to load as much as $50,000 total onto cards of new members who joined during the festival. Bonnaroo was a success for edô, Braswell said.

Braswell has also beefed-up his team by hiring two former executives of Corporate Executive Board, a publicly held executive network and research-sharing enterprise based in D.C.'s Virginia suburbs. The new execs are posted on the Left and Right Coasts, amid robust technology communities.

Alex Gershon, formerly a director of sales and marketing at CED, joined edô as vice president for product development. He's charged with increasing sales and licensing of the edô marketing platform and developing other products. He's based in the Washington, D.C., area.

Simultaneously, Meaghan Schaefer (left) became edô's chief marketing officer, stationed in the San Francisco Bay Area. By the end of her ten years with CED, she was leading sales and marketing for CED's information-technology and finance sections.

Braswell stressed that Schaefer is based squarely in the middle of some of the nation's most important social-marketing and technology ventures. From that vantage, he explained, Schaefer handles "all search, blog and viral marketing." The combined efforts of Dyke and Schaefer have helped produce numerous blog posts mentioning edô and some healthy traffic bumps for the fledgling Facecard.com site.

The just-closed Series A round, which Braswell said was managed without outside counsel, attracted first-time participation by Clayton Associates. In the 2007 round, Claritas Capital led edô's $1.5 million seed raise, which also included money from Brentwood-based Voyent Partners and other investors close to Braswell, but not disclosed.

To some extent, edô Interactive is familiar terrain for the VCs: Claritas' portfolio contains other investments in companies that provide credit and debit instruments, payments transaction services and at least one social marketing-driven venture: EvieSays.com (Dobie Media), the Nashville-based events and entertainment information service. While Clayton Associates' portfolio is weighted toward healthcare and life sciences, it also includes Franklin-based ProfitPoint, which markets gift and loyalty cards that carry what's often referred to as "stored value."

Edô Interactive has 15 employees, with headquarters in Green Hills. The edo board of directors includes, in addition to Braswell, edo Chief Operating Officer Jonathan Dyke; Voyent Partners Founding Partner Jim Kever; Claritas Capital Managing Partner John Chadwick; Mark McDonald, former chairman of Link2Gov and founding partner of Newton, Oldacre McDonald; and, Braden Kelly, a former partner at General Atlantic, the private equity firm. ♦