Since its launch, BlueSwarm has raised more than $172 million for fundraising campaigns, with the vast majority of those funds directed towards political election campaigns.
The startup, which is a platform that leverages social media tools to attract and track donations, has wooed many politicians, including several gubernatorial candidates like Massachusetts’ Charlie Baker, Wisconsin’s Tom Barrett and California’s Meg Whitman. Whitman, who has already invested a decent portion of her personal fortune into her campaign, has also amassed more than $20 million through BlueSwarm.
Now, it’s time for BlueSwarm to do a bit of fundraising on its own.
Although far from $172 million, the startup has raised an $800,000 angel round from a collection of individual investors, including Harvard Business professor Clayton Christensen. Originally founded in Boston in 2009 by Erik Nilsson, the company is also decamping for Silicon Valley. Last week, BlueSwarm officially moved its headquarters to Palo Alto as part of its larger expansion plan and a growing need to attract top tier talent in social media and consumer software development.
Political fundraising is going through a dramatic transformation.
Traditionally, politicians have heavily relied on sophisticated fundraisers who bundled donations from a network of wealthy patrons. Now, with varying degrees of success, politicians are becoming more web-focused to take advantage of social networking channels. One of the most notable examples is, of course, President Obama’s 2008 campaign. By developing a sharp online portal and tapping into Facebook’s power, the candidate raised roughly half a billion online from 3 million donors and some 6.5 million donations— most of those donations were in increments of $100 or less.
BlueSwarm, along with its competitors, are trying to facilitate this evolution by creation a platform to help politicians connect with small and large donors and ultimately, transform those donors into fundraisers. BlueSwarm is a program that lets any campaign manage and track all online donations, recruit new fundraisers and review their progress.
There is also a Facebook app, which allows anyone to sign up to donate for your campaign and promote the cause within their social circle. The idea is to create a tree of donors and fundraisers that constantly expands, as people use their personal connections to pull in their friends.”The key is that I get my personal brand on it before it gets to you…and then it becomes a personal request,” says Dave Boyce, BlueSwarm’s newly minted CEO.
According to Boyce, BlueSwarm is processing more and more transactions — the number of contributions doubled in the second quarter from the first quarter.
The company says the platform is currently being used in 50% of US Senate races and 30% of gubernatorial races, in addition to many local races. However, despite the high volume of transactions, the amount of revenues is still fairly low because BlueSwarm only takes a 2.9% cut.
In order for the team of 12 employees to expand and turn profitable, the platform will need to see a major growth in transactions. US political campaigns, which form a $3 billion annual market, currently serve as the backbone BlueSwarm’s business. Thus, BlueSwarm will need to aggressively expand in other markets, such as university and alumni giving organizations, to get a major lift in volume. Boyce contends, it’s a matter of when, not if, “We’re just entering those markets now, we’re in a dozen conversations with universities, three of whom are saying they want to go live this summer,” Boyce says. “Universities in the US raise $30 billion a year, so it’s 10 times larger from a market size.
Full interview above.
Boyce also joined us, along with angel investor Chris Sacca, for our daily episode of TechCrunch NOW. We discuss a PR roadmap for Apple and those hilariously odd The Social Network trailers.
BlueSwarm is a social fundraising platform that helps Universities, Non-profits, and political organizations leverage the existing social networks of their supporters to raise money. In October 2010, BlueSwarm officially changed its name to “Fundly.” The strength of online Social Fundraising is rooted in the concept that the best donor base is a broad donor base. Everyone should be able to contribute - no matter the size of the donation - and the best way to reach a broad donor base...