The duo had previously avoided capital funding, and used GoFundMe’s revenue of transaction fees to power their high velocity startup. Now they are selling a majority stake in the business to an investor group led by Accel Partners and Technology Crossover Ventures according to the report.
The duo will step down from day-to-day operations as part of the move, and letting Rob Solomon, a former COO of Groupon, spearhead a new leadership team and build an office in Silicon Valley. Solomon’s powerhouse lineup includes former Linkedin Vice President David Hahn as president, and DemandForce’s Hoang Vuong as COO and CFO. Damphousse and Ballester will still be on the GoFundMe board.
“I think we can become the giving layer of the Internet,” Solomon told WSJ. “In North America alone, nonprofits are a $US300 billion-a-year industry. There’s a lot of fat in there. If we do our jobs well, we can remove friction as it relates to giving.”
GoFundMe lured venture investors in thanks to its 300% growth rate. The profitable startup, which allows users to create funding campaigns for charities and any cause, has users contributing around $US100 million in donations each month. Its latest round of funding was led by Accel Partners and Technology Crossover Ventures, and other investors are Greylock Partners, Iconiq Capital, Meritech Capital Partners and Stripes Group as reported by WSJ.
It’s pretty uncommon but not the first time that investors stuck their forks into a hot tech startup and then took over. SurveyMonkey, a web-based survey solutions platform, was bought out by a group of investors in 2009.
GoFundMe remains the current ringleader of the crowdfunding business, compared to other companies like Indiegogo and Tilt, which is creeping up close to a $US400 valuation.
Business Insider Emails & Alerts
Site highlights each day to your inbox.