In huge news for the crowdfunding industry, founders of charity and personal fundraising site Go Fund Me have relinquished majority control of the company. Brad Damphousse said he and Andy Ballester will sell the controlling position in the company to an investor group led by Accel Partners and Technology Crossover Ventures.
The deal will be a huge windfall for the young entrepreneurs, who founded the San Diego-based company in 2010. A person close to the matter told the Wall Street Journal that the deal valued the company at $600 million. Techcrunch has also estimated a $600 to $650 million value for the company. This appears to be the first time the public has known the valuation of a major crowdfunding company.
Damphousse and Ballester will stay on the board of the company, which has profited about $60 million in its first five years. The site transmits about $100 million in donations per month, of which the site retains a 5 percent share. Rob Solomon, formerly an executive at Groupon and Yahoo, will take over as CEO.
“I think we can become the giving layer of the Internet,” Solomon said. “In North America alone, nonprofits are a $300 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 and other U.S.-based crowdfunding giants like Kickstarter and IndieGoGo have transformed the way Americans invest in projects and charities in a very short time. GoFundMe has looser policies than its cohorts — users can create fundraisers for almost anything, from their personal rent or medical needs in times of crisis to major fundraisers for large nonprofits. Their success has helped legitimize crowdfunding and peer to peer lending around the world.