GoFundMe announced today that it will acquire Classy, a nonprofit fundraising software company. This is an all equity deal, though the company did not disclose the financials.
Anyone can make a GoFundMe, from a local food pantry to a community member in need. But Classy is more specialized, working directly with nonprofits. Since its 2010 seed round, Classy has raised $183.5 million in venture capital, which most recently included a $118 million Series D in April 2021, led by Norwest Venture Partners. The Public Benefit Corporation employs a team of 200 and will become a subsidiary of GoFundMe, operating as a separate entity under GoFundMe CEO Tim Cadogan's leadership.
"While we are proud of the combined $20 billion the GoFundMe and Classy communities have raised for people and organizations, we recognize the unique opportunity we have to make an even bigger impact — both in the U.S. and around the world — if we do this together," Cadogan wrote in a blog post.
Cadogan hopes that the acquisition will help connect individual donors with nonprofit giving opportunities.
"This could mean that someone who makes a donation to an individual seeking relief from a natural disaster, could then be connected to a nonprofit that focuses on addressing the underlying causes of climate change," he wrote.
The company said that $5 billion was raised on GoFundMe and Classy combined in 2021. GoFundMe doesn't charge a platform fee from fundraisers (aside from standard transaction fees), but when people donate to a campaign, they can add an optional tip that helps keep GoFundMe running. By default, the tip is set to 15% of the donation amount.