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GoFundMe keeps gobbling up competitors, says it’s “very good for the market”

GoFundMe keeps gobbling up competitors, says it’s “very good for the market”
[Photo: PIRO4D/Pixabay]

Crowdfunding leader GoFundMe has agreed to acquire upstart rival YouCaring, the companies announced late yesterday, bringing further consolidation to an already concentrated industry. The companies declined to disclose the terms of the deal, beyond indicating that YouCaring’s brand would over time be subsumed by GoFundMe, as existing YouCaring campaigns wind down.

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“We’ve had conversations on and off, and now was the right time for it to come together,” GoFundMe CEO Rob Solomon told Fast Company.

Even before the acquisition, GoFundMe controlled roughly 90% of the social crowdfunding market in the U.S., and 80% of that market globally, according to the company’s own analysis. But Solomon dismissed concerns that having a single “giving layer for the internet,” as GoFundMe aspires to be, would disadvantage consumers by stifling competition.

“We think that it’s ultimately very good for the market to give anyone who wants to raise funds, anyone who wants to donate funds, access to the best and most trusted brand and services,” he said. “We want to be the first and only choice that people think about when they think about social fundraising.”

YouCaring emerged as a popular alternative to GoFundMe last year, as Facebook users spread the word about YouCaring’s tip-based model. Unlike GoFundMe, which at the time charged a 5% flat fee, YouCaring presented donors with a virtual “tip jar,” which defaulted to 15% but could be set as low as 0%. (Both companies also charged standard transaction processing fees.) To combat YouCaring’s momentum, spurred by viral campaigns like NFL star JJ Watt’s $37 million Houston Flood Relief Fund, GoFundMe switched over to a tip-based model in November.

“It’s working quite well,” Solomon said of the switch to tips, but declined to provide precise figures. YouCaring campaigns have raised over $1 billion to date; GoFundMe campaigns, over $5 billion.

GoFundMe previously acquired CrowdRise, a Detroit-based platform for nonprofit fundraising. Since that acquisition last January, it has focused on helping CrowdRise nonprofits increase their social reach, in part by giving them access to GoFundMe’s 50 million-strong donor community. The joint company has also developed white-label solutions for nonprofits, including a checkout button, powered by CrowdRise, that nonprofits can use on their own websites.

YouCaring, for its part, acquired Generosity.com from Indiegogo in January.

With those deals now complete, Solomon intends to focus for now on integration and growth. “I don’t expect that we’ll do too many more acquisitions in the near future,” he said.

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