The Tech Startup That Helps Nonprofits Raise Money

By Brittany Meiling
The San Diego Union-Tribune

WWR Article Summary (tl;dr) Although it took six years for the startup “Classy” to help facilitate its first $500 million in donations, the second $500 million came in just 14 months.

The San Diego Union-Tribune

One of the most valuable software startups in San Diego — Classy — made a splash last week when it announced $1 billion had been raised through its platform for nonprofits.

But the milestone is just a punctuation mark on Classy’s unusual growth in recent years as one of relatively few software companies to flourish in San Diego.

The startup makes software that helps nonprofits raise money online, and in recent years, it’s signed on titans of charity like the Salvation Army, among its 4,000 clients.

The big nonprofits have ramped up Classy’s growth, giving the startup a hockeystick trajectory over the past year.

Although it took six years for Classy to help facilitate its first $500 million in donations, the second $500 million came in just 14 months.

The startup raised $48 million of its own capital over the years, including a $30 million round from venture capitalists last year. That put Classy’s valuation at $150 million, according to data from Pitchbook, placing Classy in the top ranks for valuable software startups in the region.

It’s been an uphill climb, according to Classy’s co-founder and CEO Scot Chisholm.

Although software is starting to gain momentum, San Diego has not historically been a mecca for those writing code.

That’s not to say technology isn’t at the city’s core. Giants like Qualcomm and Viasat have flourished, and the region has deep expertise in computer chips, wireless systems, security, and increasingly robotics and drones.

But software is a different game. Entrepreneurs trying to build software startups have remained outliers to the business community for decades, their ambitions and needs mismatched with San Diego’s experienced leaders and even more disconnected from local wealth. After all, those who have money to invest in San Diego often made their wealth off science and hardware. They don’t have anything to offer to software companies, and therefore often don’t invest in them.

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