Norwest Venture Partners, a Bay Area firm that manages $9.5 billion, led the funding round. Existing Classy investors Salesforce Ventures and Hinge Capital also participated.
Classy intends to use the fresh capital to enter new segments, such as corporate donors, as part of its broader strategy to match more high-profile donors with non-profit companies.
In conjunction with the funding round, Chisholm will step down as chief executive and become executive chairman, where he will lead mergers and acquisitions and expansion into new markets.
Chief Operating Officer Christopher Himes will assume the role of CEO. Himes is expected to focus on recurring giving and innovation, adding that the company will focus on delivering more digital tools to encourage recurring giving.
“Donor retention is a massive problem in the nonprofit space,” said Himes. “So, we’re trying to help increase that through an amazing donor experience and converting more donors to recurring gifts. For nonprofits, online fundraising is the highest margin fundraising category. It’s the most secure and it has the highest retention.”
Himes spent six years at Salesforce, including as a senior vice president, and was an executive fellow at the Salseforce.com/Foundation. Himes also was chief financial officer at Fair Trade and served on nonprofit boards, including There With Care and the Trust for Public Land.
“We’re essentially creating a ‘startup within a startup’ which really is energizing for me,” said Chisholm. “Having Chris at the helm from a CEO perspective, will be phenomenal for the organization moving forward. I’ve never been more excited about Classy’s future.”
Over $3 Billion Raised
Founded in 2009, The idea for the company was inspired after Chisholm and his friends helped raise funds for the American Cancer Society in San Diego. A few years later, in 2011, Classy was formally launched as a technology venture with a focus on the online space, which makes it easier for non-profit companies to connect with donors.
It serves over 6,000 nonprofit customers including Team Rubicon, Trevor Project, Salvation Army, Robin Hood Foundation, and Shriners Hospitals for Children. Nonprofits on its platform have raised over $3 billion, to date.
Classy offers several fundraising services that can all be used for various forms of crowdfunding, including direct appeals, peer-to-peer campaigns and event management.
Roughly 20 percent of total giving on Classy’s platform is done by donors who “subscribe” to nonprofits and pledge to give on a regular basis.
Entering New Markets
Looking ahead, the company plans to double the size of its product and engineering organization over the next two years, as well as enter into new markets such as corporate giving.
Classy announced it will reincorporate as a Public Benefit Corporation, accelerating the timeline it initially put forth after becoming a certified B Corp in December. It also announced that it will immediately repay its Paycheck Protection Program (PPP) loan.
“Last year was especially challenging for nonprofits, forcing them to adapt their fundraising efforts to meet the needs of their recipients while increasingly leaning on technology solutions,” said David Su, partner at Norwest. “As the social sector looks to reach new audiences on digital platforms, Classy is poised to support this growing market demand.”
It is rare for San Diego technology startups to get $100 million-plus funding rounds from investors. Before this latest round, Classy had raised just $45 million.