In January, we wrote about The Future of the Worker-Employer Relationship and the belief that the traditional bond between the employer and employee will grow weaker over time. As employees re-evaluate the role that work plays in their lives, we believe that they will increase their affinity with other aspects, including social causes and core values they hold. This shift has led to a rise in local “changemakers” that bring attention to their causes through fundraising and giving donations. Our newest portfolio company, Givebutter, empowers these small organizations via their fundraising platform, and we could not be more excited to invest in their $7 million seed round.
Givebutter is the #1 rated fundraising platform on G2, providing digital solutions for donation forms, fundraisers, events, donor management (CRM), and more. The product is beloved by its customers, including a diverse base of nonprofit organizations such as school committees, churches, arts groups, and foundations. Skeptical at first, we were impressed by how large the market is for Givebutter’s target customer. Over 1.7 million registered non-profits raise $450 billion in the U.S. each year, and 80% of those are small nonprofits that each raise less than $10 million annually. Furthermore, a portion of Givebutter’s users are not registered nonprofits but rather small groups raising for important causes. The easy-to-use, do-it-yourself model unlocks the possibility of effectively and successfully fundraising for anyone.
One of the most compelling aspects of Givebutter is its business model, which includes a 100% transparent fee or tip option. The company’s creative use of embedded fintech to include payment processing allows it to better cater to small organizations that do not have large budgets to pay expensive subscription fees. We believe this model is the next frontier for software companies; generating revenue through embedding financial services expands the market significantly by attracting new customer segments and increasing revenue per customer. For a traditional subscription fee model in this segment, the market opportunity is about $1.6 billion annually, but when the revenue model is contingent on embedded financial services (payments, accounts, tax services, etc.), it expands to over $9 billion. This model also leads to stronger customer satisfaction due to a frictionless experience that does not require additional parties to complete financial transactions such as payments, lending, or bank accounts. The proof of this is the strong community of fundraising professionals who love what they have built. The success stories on their site are a small view into the 100,000+ users that continue to recommend the platform to their peers.
With six years and more than $300 million in donations under their belt, we have a lot of conviction in Givebutter’s ability to execute its mission. The founding team has built a phenomenal product that continues to produce organic growth. Having worked together previously, founders Max and Liran have been able to scale significantly using very little starting capital. Their success can also be seen within the strong brand and community built around the company.
Along with the community of changemakers, Ardent joins a group of all-star angel investors that took part in the seed round, including Tope Awotona from Calendly, David Cummings of Pardot/SalesLoft/Calendly, Shahed Khan from Loom, Jenny Bloom from Mailchimp/Zapier, Elena Gomez from Toast, Shreyas Doshi from Twitter/Stripe, Geof Barker from Smartsheet, Jon Hallett from BetterCloud, Sam Parr, Shaan Puri, Sahil Bloom, Julian Shapiro, Allen Gannett, and Jay Love. We are thrilled to participate in their journey and look forward to what Givebutter has in store.
