GoFundMe announced on Thursday that it’s struck a deal to acquire Classy, the top crowdfunding platform in the nonprofit sector. The companies didn’t disclose the details of the deal, beyond saying it was all equity and should close sometime this quarter, but it will let GoFundMe, the world’s largest crowdfunding site, to tap much deeper into a big arena for donations: the $500 billion philanthropic sector.
“GoFundMe’s vision is to be the most helpful place in the world, and partnering with Classy enables us to do that in a differentiated way,” CEO Tim Cadogan said in the press release, explaining that together they can “create a unique powerful network that connects donors on GoFundMe to nonprofits who use Classy.”
Classy’s CEO, Christopher Himes, added that the acquisition will allow them to “help nonprofits raise more so they can increase their programmatic impact,” calling the move “an opportunity that could change our industry in a way that has never been done before.”
The deal turns Classy into a GoFundMe subsidiary. Cadogan will become Himes’s boss, although their two crowdfunding platforms will continue to operate independently.
As Cadogan noted in his statement, GoFundMe’s aim is to be “the most helpful place in the world.” Being most helpful would seem to also imply becoming bigger, if you can. GoFundMe has continually surprised even itself with the power of crowdfunding: Today, it says one in three campaigns is launched in order to help pay someone’s medical bills. GoFundMe admits that was never the platform’s point (“It wasn’t purposefully set up and built to be a substitute for medical insurance”), but it now describe itself as the “leader in online medical fundraising.”
Founded in 2006, Classy—a B Corp-certified company started in San Diego, whose name was inspired by Ron Burgundy’s sign-off in Anchorman, “You stay classy, San Diego”—has raised hundreds of millions of dollars in recent years from investors like Salesforce Ventures and Peter Thiel’s Mithril Capital. It says it now boasts more than 6,000 nonprofits as platform clients, including Shriners Hospitals, Malala Fund, Teach for America, Oxfam, the UN’s World Food Programme, and National Geographic. It adds that it’s helped crowdfund nearly $4 billion since 2006—but that over a quarter of that, $1.1 billion, was raised in 2021 alone. GoFundMe, meanwhile, says it’s brought in more than $15 billion from 200 million donations since it was founded in 2010.
The acquisition may give pause to critics of industry consolidation. (Antitrust enforcers at the Federal Trade Commission and the Justice Department have been complaining about being overwhelmed for months; a new report out this week shows that for 2021, U.S. companies reported 4,130 mergers—more than double the previous year’s number.) Indiegogo and Kickstarter are still popular crowdfunding sites for artists and entrepreneurs, but Classy is the market leader among nonprofits.