Crowdtilt Grabs $23M to Become the ‘WordPress of Crowdfunding’

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Lora Kolodny
December 16,

 

A startup that wants to empower people to run crowdfunding campaigns wherever and however they want to online, Crowdtilt Inc., raised $23 million in Series B venture funding led by Andreessen Horowitz, and joined by SV Angel and Sean Parker, said founder and Chief Executive James Beshara.

 

Crowdtilt, a graduate of the Y Combinator accelerator, has been in a rapid growth spurt following the launch of its mobile app, API and Crowdhoster tools.
The company started out with a focus on group payments. Its app lets people gather payments from friends and family, colleagues or community to buy things they will use together, or pay for shared experiences and support shared causes. Think: splitting the bill evenly for a weekend ski trip in Tahoe; or helping a family out with contributions to cover the cost of a funeral.

 

The Crowdtilt API and Crowdhoster app–the latter enabling users to create a crowdfunding page without ever touching code–set the young startup apart from earlier success stories in the crowdfunding realm like Kickstarter Inc . or Indiegogo Inc .

 

Crowdtilt’s newer tools allow developers or fundraisers without technical skills to “pre-sell, group fund or fundraise” on their own domains or Web pages, where they can “customize their messaging and design” and “keep the full attention” of their backers, Mr. Beshara explained, drawing a comparison to the content management system WordPress.
In April, Crowdtilt raised $12 million in a Series A funding round also led by Andreessen Horowitz, and tripled the size of its full-time staff, moving into a new office space in San Francisco’s South of Market neighborhood.

 

One day, the CEO wants to see brands like Nike “pre-tailing” a new run of its iconic Jordan One sneakers online, or the World Cup using Crowdtilt to pre-sell tickets. But for now the company’s users have been smaller startups and individuals.

 

Among them have been Soylent, a startup that makes a meal-replacement shake; a 2014 Oakland mayoral candidate Bryan Parker; a maker of electric- and gas-powered bicycles, Local Motors Inc.; and an independent publisher called McSweeney’s, founded by author and education activist Dave Eggers.

 

McSweeney’s editor Annie Wyman, who is a childhood friend of Mr. Beshara’s, said that by embracing the new technology, the witty and quirky brand–better known by bookworms than hackers–was able to sell in its first day using Crowdhoster what it would otherwise sell in a week via its pre-existing e-commerce and offline stores, without giving traffic away to anyone else’s website.

 

With Crowdhoster, a user can run a campaign on his or her own home page or domain, whereas platforms like Kickstarter and Indiegogo require fundraisers to promote links to their sites, and direct potential backers to login there.

 

A general partner at Andreessen, and board member at Crowdtilt, Jeff Jordan, says his firm invested in the startup again because “their rate and robustness of product delivery” has been impressive, and “there is no majority use case for Crowdtilt, it is a horizontal crowdfunding or group funding platform that can be used by everyone.”

 

The company’s executives and investors are fond of comparing Crowdtilt’s technology with that of WordPress, the content management system that is used predominantly in North America by large media organizations and independent bloggers alike to publish news and long-form content. WordPress founder Matt Mullenweg is among Crowdtilt’s advisers and earlier investors.

 

Mr. Jordan says the Series B funding will fuel Crowdtilt’s move to international markets. The startup could avoid “rapid emulation” and prove a dominant, global player in crowdfunding given its Series B financing, Mr. Jordan said.

 

While Crowdhoster is an open-source tool, and the company does not generate revenue from it today, Crowdtilt has generated revenue “from day one,” the CEO said, by charging a 2.5% fee for funds raised on its platform starting when a user’s campaign “tilts,” or meets its fundraising goal.

 

http://www.crowdtilt.com
Write to Lora Kolodny at lora.kolodny@wsj.com. Follow her on Twitter at @lorakolodny