Classy Raises $18M in Round Led by Peter Thiel’s Mithril Capital
Classy, a four-year-old San Diego startup that provides online fund-raising services for Teach for America, Oxfam, and other nonprofit organizations, has raised $18 million in a growth-funding round led by Mithril Capital Management, according to a statement from the company. Mithril is the San Francisco investment firm founded in 2012 by PayPal co-founder Peter Thiel and Ajay Royan.
Salesforce Ventures, Bullpen Capital, Venture51, Galileo Partners, and Rethink Impact joined the round.
Michael Young, the former chief technology officer at Redfin and Plumtree, also is joining Classy as its first CTO. Classy, which currently has about 80 employees, plans to use the funding to triple its engineering team and accelerate its global expansion.
Over the past four years, Classy says it has hosted more than 300,000 fund-raising campaigns on its website, enabling millions of people to provide contributions to more than 1,500 nonprofit organizations. But as Classy co-founder and CEO Scot Chisholm explains, the company’s roots extend to 2006, when he worked with several friends to organize a pub crawl with the idea of donating extra cash to the American Cancer Society.
“My mother had battled breast cancer twice as I was growing up, and most of my friends also had similar stories,” Chishom wrote. Taking inspiration from the Will Ferrell movie Anchorman, Chisholm added, “We quickly jumped at the chance to name our first fundraiser after Ron Burgundy’s catchphrase in the movie, ‘You Stay Classy, San Diego.’ And thus, the StayClassy charity pub crawl was born.”
It soon became clear, however, that nonprofits like the American Cancer Society were not making use of Web 2.0 technology innovations or social media to engage with young, social-minded donors. After developing StayClassy as an online fundraising platform that facilitated the event registration and peer-to-peer funding for their own events, the founding team saw a bigger opportunity emerge.
“So in January 2011, five years after the original StayClassy charity pub crawl, we launched a much improved version of the Classy fundraising platform and opened it up to any nonprofit organization that wanted to use it for its own campaigns and events,” he says.
Classy has not disclosed how much investment capital it raised before yesterday’s funding round, but online crowdfunding is becoming an increasingly competitive area of startup activity. At least a dozen other startups provide Web-based crowdfunding-as-a-service for nonprofit groups and charitable causes, including San Francisco-based Causes.com; New York’s DonorsChoose; Boston-based FirstGiving; Vancouver, BC-based FundRazr; and Santa Barbara, CA-based Givezooks!
The founders of GoFundMe, another San Diego startup also focused on Web-based crowdfunding for charitable causes and organizations, sold a majority stake in their company just last week in a deal that valued GoFundMe at $600 million.