RALEIGH – MemberHub, a Raleigh-headquartered developer of software for community-based nonprofits that enables them to engage supporters and solicit and receive donations online, has raised more than $3.25 million, and plans to launch a new product in 2022 with the capital infusion.
The company had raised funding previously, said Will Bowen, the firm’s CEO, in an interview with WRAL TechWire, with the purpose of developing software “to serve a growing network of causes and their supporters.”
To date, the firm has raised more than $7 million in capital, including a Series A round in 2020 and $1.2 million in 2019, which has enabled the company to build its technology capabilities, hire staff, and expand the firm’s nonprofit client base, said Bowen.
Now, the company will use its latest funding round to make “ecommerce a force for social good,” said Bowen. “We are preparing to launch a consumer cashback app,” he shared, adding that the firm has already inked partnerships with companies across the country that enable the platform to bring more than 40,000 businesses into its ecosystem.
“Our vision is simple,” said Bowen. “Every time a shopper makes a purchase on their desktop, phone, or in person at more than 40,000 participating merchants, they will automatically get up to 10% cashback, and their cause gets up to 1% back, at no cost to the consumer, just like magic.”
The company has already tested the product, which Bowen said would become the “first socially-minded commerce network in the United States.” Bowen added that the “alpha” users of the product have provided invaluable feedback that is incredibly positive. ” The time is right for this model,” Bowen said.
Where MemberHub began
The company began developing software that aimed to assist community-based nonprofits engage supporters and raise money through online fundraising, said Bowen.
Throughout the prior three years, said Bowen, the company conducted extensive research and gained a greater understanding of individuals who choose to support nonprofit organizations with volunteer time or with financial resources, and how nonprofit organizations can engage with them with limited time and staff resources.
The company also studied the sector’s “systemic needs, which were further strained due to the impacts of COVID-19,” said Bowen. “These organizations have been severely impacted due to the pandemic and we are excited to help them get back on their feet with our free software.”
The organization now serves more than 13,000 organizations, noted Bowen, and in the third quarter of 2021, the company’s software enabled these nonprofit organizations to raise more than $20 million for their causes.
“Our core product is MemberHub, an all-in-one platform which helps nonprofits raise money with on-line fundraisers and e-commerce solutions and also communicate online,” said Bowen. But coming soon is the firm’s new technology that will enable the firm’s execution of ecommerce for good.
The MemberHub software is free for nonprofits to use, said Bowen, and the company generates revenue from a “small platform fee on transactions within our organizations’ online stores and online fundraisers.”
And the company is building a new business model with its latest technology project, the development of the cashback offering, which Bowen said would be merchant-funded. “When consumers make a purchase and earn cashback, the merchant pays us a fee for bringing them a new customer,” said Bowen. “We then give part of that fee back to the consumer and to their chosen cause.”
At least one million nonprofit organizations based in the United States will be able to participate in the ecommerce model, Bowen said. “It is a double bottom line business on steroids.”
“This is a new model for the e-commerce world at large, and one that we think introduces value for the millions of consumers who want companies to do good and will use their consumer dollars to see that happen,” added Bowen.
The dual model and the company’s recent growth in its client base were attractive to the firm’s existing Series A investors, Bowen noted. Each of the Series A investors also participated in the latest fundraising round, said Bowen, adding that local angel investors, including Dennis Dougherty, Mitch Mumma, and Michael Jones, participated in the latest round.
“We have backed over 50 tech startups and this one has the markings of a winner, ” said Dougherty, who is the managing director at Intersouth Partners. “Not the least of which is a CEO who is building a company to win. He only raises funds for what he needs and understands the importance of sales traction and profits.”
Scot Wingo’s new Triangle Tweener Fund will also participate in the round, Bowen shared. Jones and Dougherty will both be on the company’s board of directors, said Bowen.
The company has raised $3,254,123 from 24 investors in total, according to the firm’s SEC filing, and could raise as much as $4,451,638 in this funding round.
New funding, new technology, and new jobs
The company employs 22 people, and anticipates hiring additional talent in what has become a highly competitive labor market.
“We are hiring within product and engineering, customer success and customer support,” said Bowen. We’re hiring to build the team that believes in our mission and wants to see the dream come to life and do so, right here in the Triangle.”
Specifically, Bowen noted that he is seeking to see candidates attracted to the company who want to feel invested in the product, and who are seeking a fast-paced startup environment.
“The talent market in early 2022 is competitive,” said Bowen. “The Triangle continues to attract technology, product, marketing, and sales talent, as companies relocate or open offices in the Triangle.”
“We think we can build something really special right here in the Triangle,” said Bowen.