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IVP Adds Crowdfunding Leader Indiegogo to its Portfolio

28/01/2014

Today, IVP announced an investment in Indiegogo, the world's largest and fastest-growing crowdfunding platform.

IVP led Indiegogo's $40 million Series B funding round along with Kleiner Perkins. The financing will accelerate the company's mission of democratizing funding globally. This is IVP's first investment in the multi-billion dollar crowdfunding space and it represents validation of not only Indiegogo's business model, but also of the overall sector.

Indiegogo has all the characteristics of a company that can be a dominant, market-leading business that lasts 50 or 100 years, according to Jules Maltz, General Partner at IVP. We think the crowdfunding industry is really at its infancy right now, but will grow to become a massive sector.'

Since launching in 2008, Indiegogo has experienced explosive growth. Funding campaigns during the past two years have spiked 1,000 percent. Indiegogo has hosted more than 190,000 campaigns from nearly 190 countries. Unlike some other crowdfunding vendors, Indiegogo provides an open platform and flexible funding model that allows anyone to participate.

IVP moved incredibly quickly on the Indiegogo deal. We expressed our passion for Indiegogo's core business and mission and had a signed term sheet within 10 days of our initial meeting, Jules explained.

On the Indiegogo side, founder and CEO Slava Rubin acknowledged how competitive the round was. We spoke with many firms including IVP which has a long track record of partnering with great companies, in particular, consumer-facing Internet companies such as Twitter, Snapchat, Dropbox and SoundCloud. We had a positive experience engaging with IVP during the fundraising process and decided they would be ideal partners.

Specifically, Jules made it a point to really understand the business as opposed to just trying to understand the numbers, Slava added. Jules along with Dennis Phelps and the entire IVP team bought into Indiegogos democratizing funding' vision which was really important to our founding team.

Marketplace business models weigh strongly in IVP's client roster. The firm is an investor in HomeAway, the largest vacation rental marketplace, RetailMeNot, a marketplace for coupons, Care.com, a marketplace for care, and Twitter, a marketplace for ideas and information. Indiegogo is another attractive marketplace that has high margins and strong barriers to entry.

Indiegogo's competitive differentiation is its flexible funding platform, says Jules. Campaigners don't have to set a fixed goal like on many other crowdfunding sites. They can raise however much they want. The platform is also open - anybody who wants to start a project can start one in minutes. Indiegogo campaigns don't require a team of people to curate projects or to decide what can or cannot be funded. It lets the people on the ground decide and is set up for scale.

For example, Maltz notes, In terms of cross-border payments, multi-currrency and fraud detection, Indiegogo owns the best in-house technology in the industry to build a massive platform.

IVP's six general partners were also impressed with Indiegogo's three passionate founders who literally eat, breathe and sleep the mission of democratizing funding for everybody, anywhere.

They have demonstrated that they can hire some of the best talent in the world, from companies such as Etsy and Google and other great companies around the valley and in New York, noted Jules.

Going forward, IVP will help with challenges around scaling the business from 85 people to several hundred globally. Every company in our portfolio goes through this process and it will be fun to work with Indiegogo and to share lessons from our strategy as a focused late-stage investor, Jules explained.

We will also help give guidance around potential future M&A and IPO transactions, he said. In addition, I will be personally joining the Board and working with the company closely.

Interestingly, IVP's first connection to Indiegogo started out with a personal touchpoint. Jules helped his wife fund a campaign for her non-profit in Oakland, California called Techbridge. The online campaign actually exceeded its initial funding goal. Techbridges mission is to help girls excel in science, technology and engineering. Jules' sister also used Indiegogo to fund costumes for a play that she was producing in New York.

I think giving people the ability to fund their passions and doing something good for the world is what Indiegogo is best at, Jules said.

IVP's General Partners couldn't be more thrilled to be working with Slava Rubin and his incredibly talented team as they build a huge, lasting company with a deep and profound mission: making Indiegogo the world's funding engine.

--
LINK: http://www.ivp.com/news/press-release/ivp-adds-crowdfunding-juggernaut...
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