GoFundMe, one of the largest crowdfunding platforms currently around, has acquired CrowdRise. While the latter will remain fully operational in its current state and under its own name, GoFundMe may take a leaf out of its book and expand to introduce funding for charities and non-profit organizations to its platform.
The financial details of the transaction have not been disclosed.
GoFundMe was founded in 2010 by Brad Damphousse and Andrew Ballester. It was initially launched as CreateAFund and the name was changed after the platform received a bunch of upgrades and became vastly more powerful. The Damphousse-Ballester duo controlled the organization until 2015, when they agreed to sell a majority stake in the venture to Accel Partners. Accel’s purchase valued the firm at somewhere around $600 million.
GoFundMe has seen people come together to fund all sorts of things ranging from celebrations towards curing someone’s illness. The platform has seen people raise over $3 Billion to date.
CrowdRise on the other hand, was also founded in 2010 by Edward Norton, Shauna Robertson, and Robert and Jeffrey Wolfe. However, the company adopted a slightly different model that involved using a rewards point system to get more users involved in giving to a cause. Charitable folks from across the world have raised over $500 million for various causes.
While GoFundMe counts Accel Partners as its main backer, CrowdRise has raised over $24 million from a clutch of investors that include Union Square Ventures, Bezos Expeditions, Index Ventures, Spark Capital, Lightbank and others. Interestingly, the investments in CrowdRise have also caused plenty of raised eyebrows as people wondered what an organization that was supposed to have helping others as its main goal was doing, to attract this amount of investor attraction.
The organization deducts a transaction fee over each donation that is made, citing business costs. Several questions were raised over how this “Transaction fee” apparently, was enough for some big shot VC firms to invest in the platform.
Meanwhile, the platforms will continue operating independently. Only, CrowdRise will have GoFundMe as its parent company from now onwards. Considering that CrowdRise lays a lot of focus upon funding larger campaigns that often involve NGOs and other organizations, the acquisition could also signal GoFundMe moving beyond peer to peer donations and into larger campaigns as well.