European online charity auction platform CharityStars, which counts eBay as its main competitor (in addition to CharityBuzz and IfOnly), has closed a modest €2 million in Series A funding. The round is led by 360 Capital Partners, with participation from A.S. Roma soccer player Stephan El Sharaawy, and LastMinute Group CEO Fabio Cannavale.
The Milan, Italy-headquartered startup recently opened an office in London and says it will use the new funding to formally launch in the U.S. and China, where the auction platform is already seeing traction.
“We have just launched the Chinese version of the site and we want to invest in targeted marketing campaigns,” explains CharityStars co-founder Francesco Nazzari Fusetti in a statement. “A paid online acquisition campaign would be a first for us, given that to date we have just benefited from free celebrity promotion through their social media channels.”
To that end, CharityStars claims to have partnered with over 400 nonprofit organisations, who are each holding an average of 10 charity auctions per year. The goal is to reach 2,000 charity partners by 2018. Another interesting metric is average auction sale price, which stands at €500. CharityStars aims to double this within two years.
That’s because the startup charges a 20 per cent commission per auction, which is in stark contrast to eBay’s free listings for charities. Therefore, the higher the item goes for, the more revenue CharityStars generates.
“Charities have always used eBay to sell items,” Nazari Fusetti tells me. “But those auctions are spread into millions of other auctions and they have lost their unicity. In CharityStars we have created a specific platform where VIPs, companies and users come together for the greater good.”
Another differentiator is the way CharityStars’ platform is designed to bridge the gap between in-person charity galas or auctions, and online bidding. During events, guests bid using a tablet computer placed on their table with the startup’s app installed, while online users can simultaneously bid against guests.
Noteworthy is that CharityStars has recently opened up the auction platform beyond nonprofit organisations to private individuals who want to auction off items and give a percentage of the proceeds to charity.