Crowdfunding has become a big industry, as people are increasingly seeking ways to finance new creative projects and technology ideas. But one crowdfunding startup is focusing more on helping people raise money for personal needs, and is starting to process some serious funding in the meantime.
That startup, called GoFundMe, was actually founded in 2008, long before Kickstarter made it big and around the same time that IndieGoGo first hit the scene. But even though it’s less well known than those others, it’s still the number three crowdfunding site in the world, based on its current traffic… And it’s still entirely bootstrapped.
GoFundMe might not have the cachet of the traffic of some of the other crowdfunding platforms, but it’s also going for a different demographic and a different use case. While Kickstarter is quickly becoming a place for creatives to fund new independent films or albums, as well as a place for startups to fund their hardware ambitions, GoFundMe continues to operate mostly as a place where users can ask friends and family to help fund major life events.
So for instance, users can solicit funds when they’re planning a major trip overseas, or if they’ve gotten into a car accident and don’t have insurance. Maybe they lost their job and are in need of some rent money. Or maybe they’re raising money for their local youth sports league. You know, that sort of thing. Another difference between GoFundMe and other platforms is that users keep all the cash they pull in, without having to worry about time limits for campaigns that are set up or hitting a minimum funding requirement.
Today, campaigns that raise money for medical funds make up about 17 percent of all user activity. Campaigns for school tuition, which make up 11 percent of activity, and those for volunteer trips, at 10 percent, round out the top three use cases.
While it has gotten a slow start relative to some other platforms, GoFundMe has seen 20 percent growth month-over-month since last October. It charges a 5 percent fee for its campaigns and last month pulled in more than $2 million. Based on its current growth trajectory, GoFundMe expects to raise more than $37 million in for 2012.
Of course, crowdfunding has become extremely popular over the past year or so. When asked why GoFundMe and others are seeing such tremendous growth lately, CEO Brad Damphousse told me it was mainly due to the maturation of payment processing — allowing individual users to accept credit card payments — as well as social platforms like Facebook, which tie campaigns to identity and link them to people users know.
GoFundMe was founded in San Diego, Calif., and currently has just four employees, having never taken any funding. The site currently operates in the U.S., Canada, Australia, U.K. and all European Union countries that use the Euro as their local currency.