Some consolidation is underway in the world of crowdfunding and online fundraising: YouCaring — which competes with GoFundMe and others in the area of sourcing fundraising for compassionate and charitable causes — is buying Generosity.com from crowdfunding giant Indiegogo (which originally launched as Indiegogo Life).
The latter is using the divestment to further hone its focus on crowdfunding campaigns for hardware startups and the ecosystem of services around that, such as a marketplace to sell that hardware, as well as an equity crowdfunding platform and an ICO platform to help those startups get further off the ground.
YouCaring and Indiegogo are also entering into a long-term partnership. Starting February 1, any inbound interest coming to Indiegogo for charitable giving will now be funnelled to YouCaring, and any parties that contact YouCaring wanting to start crowdfunding campaigns that are not focused around its mission of non-profits and charitable causes, will be funnelled to Indiegogo.
Existing campaigns on Generosity.com can continue to use the platform until March 2018; new campaigns will be redirected to YouCaring.
Terms of the deal — including the price paid for Generosity.com or what kind of a revenue share each party gets from referrals and subsequent activities — are not being disclosed, YouCaring’s CEO Dan Saper said in an interview.
He added that Generosity.com is about 15 percent of the size of YouCaring, in terms of how much each respectively raised in funding last year.
YouCaring has raised around $1 billion for those who set up campaigns on its platform since it was founded in 2011. It has also racked up 10 million donors and 100 million site visitors, and claims the record for the largest crowdfunding campaign of all time, on any platform, raising $37 million for JJ Watt’s Harvey Relief Fund.
Indiegogo’s effort has seen considerably less activity in comparison: it’s only raised $100 million for campaigns since its founding in December 2014 — which Indiegogo’s CEO David Mandelbrot described in an interview as a “steady part of Indiegogo’s business,” but perhaps a distraction from its main focus today.
“Raising money for non-profits has a very specific set of needs and it was getting harder to meet them given our growth in the other part of the business and our focus there,” said Mandelbrot.
He would not share numbers on Indiegogo’s mainstay business but said that its new marketplace to sell hardware directly to customers has doubled since launching in October last year; he also said that its equity crowdfunding has seen “tremendous growth” and that its first ICO has raised over $5 million in its pre-sale period. Partnerships with more established businesses like Honeywell to roll out more experimental ideas is also growing, he added.
YouCaring operates in the same space as GoFundMe, a veritable behemoth when it comes to charitable giving platforms, with $5 billion in donations to date.
But with economics, social programs, and modern life being what they are, there are a lot of people in the world who can use a helping hand these days. And so, as more have turned to the internet and leveraging social and viral mechanics to spread the word about their need to raise funds, and more have chipped in to do so, that rising tide has lifted more than just the very biggest boat.
YouCaring has looked to differentiate itself in a few ways from its closest rival.
The company has never disclosed how much money it has raised — noting only one backer, Alpine Investors. Saper said that there is at present the company is not making any efforts to raise more, and it finances all of its activities, including acquisitions and business development, from its balance sheet. “We are fine,” he said. “We are profitable at this point.”
(GoFundMe also has never disclosed how much it has raised, but it has some very big names — and likely substantial backing — behind it, including Iconiq, Stripes Group, Accel, TCV, Greylock and Meritech. Indiegogo, meanwhile, has raised just over $56 million with a long list of investors that includes IVP, Kleiner Perkins, Max Levchin and others; it hasn’t disclosed any funding since 2014.)
Interestingly, that balance sheet and YouCaring’s business model are about as well aligned as they could be with the company’s platform: the company only makes money based on voluntary donations. Setting up a campaign on the site is otherwise totally free.
“We have never had a platform fee and never will,” Saper said. He declined to say how much the company makes in revenues (that is, from these voluntary donations) but said that over 70 percent of all users tip the company something. “It has been remarkably sustainable and predictable,” he said. “We treat people like adults and let them decide who to support and how much to give.”
Interestingly, GoFundMe and Facebook have recently also dropped platform fees for causes-based giving, and GoFundMe has included a tipping option. “We think this is great. It should be free and we’re glad they have taken our lead,” Saper said of their moves.
YouCaring is certified as a B Corporation, a designation given to for-profit companies that adhere to certain social and environmental standards, and Saper said he sees the free aspect of the platform as part and parcel of that designation.
To date, YouCaring has focused on three areas of giving: personal, charitable (which it has started to do increasingly in partnership with high-profile organizations like Major League Baseball), and medical donations. The last of these three is currently YouCaring’s biggest giving category, and it got a significant boost from the only other acquisition that the company has ever made, GiveForward, which it acquired in March 2017.
Saper said that these acquisitions — of GiveForward and now Generosity.com — coming within a year of each other are not a sign that the company is gearing up to make more deals.
“Acquisitions are not a key pillar for us but we’ll do so when we can find incredibly good services that could help us extend our mission,” said Saper. “I’d say we are more opportunistic than proactive in our acquisitions strategy.”
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