Posted on Wednesday, Jun 24th 2015
A recent Massolution report estimates the global crowdfunding segment to grow to $34.4 billion by the year 2015. Crowdfunding is estimated to have grown 167% in 2014 to raise $16.2 billion. Billion Dollar Unicorn club contender GoFundMe is a rising star within the industry.
San Diego-based GoFundMe was founded in 2008 as CreateFund.com by Brad Damphousse and Andrew Ballester. The idea for the site came when Brad was trying to open a savings account online to save up for his vacation. Back in 2008, he realized that doing that online was not an easy process and he came up with an idea of wanting to open a web-based ‘social’ savings account that would let users make deposits. He connected with his friend and programmer Andy Ballesterm, who saw the opportunity in his idea and quit his job to help set up the website. The idea gradually transformed to become an online subscription fundraising service for small charities. Driven by the desire to improve the offering, especially for people who were raising money through their site for personal causes and events, they re-launched the service in 2010 under the name GoFundMe.
Today, GoFundMe is a leading personal donation website that simplifies the process of donating and raising money. Users can create their online donation website and share it with friends and family through social media connections including Facebook, Twitter, and via email. Subscribers can then begin to receive donations through the website to their PayPal accounts and have helped users raise more than $1.1 billion in donations so far from over 13 million donors.
GoFundMe charges a 5% fee for all online donations collected through their portal and a 3% processing fee is deducted from each donation. By early 2012, the company was raising $1 million a month and before the end of the year, their payment volume was more than $5 million a month. As of April 2014, that volume had grown to over $1 million a day. Earlier this year, they were trending at $100 million raised from campaigns every month.
GoFundMe does not disclose its financials, but at their most recent disclosures on funds raised, they appear to be trending at revenues including processing fee of $8 million a month or $72 million a year.
The company has achieved these significant milestones while remaining bootstrapped. Last week, though, they finally raised venture capital funds. They secured an undisclosed amount in funding from firms including Accel Partners, Technology Crossover Ventures, Greylock, Meritech Capital and Stripes Group. The round is estimated to have valued them at $500 million.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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