Y Combinator-incubated SwipeGood, a startup that allows you to donate to charity each time you buy, is using its Start Fund money to benefit others. In case you didn’t catch this bit of news, DST’s Yuri Milner and SV Angel have teamed up to launch the Start Fund, which gives all Y Combinator startups a $150,000 investment in the form of a convertible note with no cap and no discount. Launched in November, SwipeGood is giving the $150,000 to charity.
Here’s how SwipeGood works. Once you enroll your credit/debit card with SwipeGood, every purchase you make gets rounded up to the nearest dollar. So for a $50.50 purchase of groceries, $0.50 will be given to charity. At the end of the month, SwipeGood will send your total donation amount to the charity or cause of your choice. To participate in SwipeGood, consumers have to enroll their credit card and the service will track your purchases, similar to the way Blippy works.
Now SwipeGood is giving every user who enrolls on the service $1000 that they can give away to charity. They do so by inviting their friends to SwipeGood and every time someone signs up through the invitation, SwipeGood gives them $10 for their charity. Users can invite up to 100 people and choose from hundreds of charities to donate to, including Charity Water, Room to Read and Invisible Children.
SwipeGood’s move to give away the $150,000 is a little unorthodox but I guess the campaign could be considered as a marketing initiative. As SV Angel managing partner David Lee told us in January, “These aren’t gifts, we’re not a charity. It’s an investment that gives these startups that first critical $150k that gets them to product. We intend to make money on these investments.”
What do you think? Is SwipeGood’s campaign a wise use of $150,000?