GoFundMe shows users how it's done, cashes in with $600m valuation

Convincing people to give money to other people is a lucrative business

Online hat-passer GoFundMe has sold off a controlling stake of its business to investors who value it at roughly $600m.

The Wall Street Journal cited sources familiar with the matter in reporting the donations broker had completed a round of venture capital funding that culminated with investors taking over the majority control.

The amount of VC funding raised in the round was not given.

Previously controlled by co-founders Brad Damphousse and Andy Ballester, GoFundMe was founded in 2010 and is based in San Diego. The site, as its name would suggest, allows users to set up fundraising pages for various charitable campaigns on donation drives.

Unlike other crowdsourcing sites such as Kickstarter, GoFundMe doesn't usually host business propositions or commercial projects, but is instead used to rally money around a cause or group facing hardship. GoFundMe makes money by extracting five per cent of the funds (and a three per cent processing fee) before giving the money to the organiser and (presumably) the subject of the fundraiser.

The site says that it has thus far raised over $1.1bn in pledges from 13 million donors since its launch, with daily donations now averaging around $4m.

GoFundMe has not been without its share of controversial projects. Earlier this year, amid the debate over marriage equality in Indiana, a conservative group used the site to raise over $800,000 in handouts to a pizza parlour in Indiana facing boycotts for saying it would not cater a gay wedding. ®

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