#052: Pub Crawl To Billion Dollar SaaS Company, Operating Maps, vSaaS vs hSaaS EBITDA Analysis

One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week. Written by @LukeSophinos and coming at you one day early this week given the holidays.

Dec 24, 2023

Classy: vSaaS for Non-Profits

A PUB CRAWL turned into a BILLION dollar SaaS company.

Yes. You heard that right...

This is beautiful the story of Classy:

Classy is a social enterprise tech company that creates modern online fundraising tools for nonprofits. It was founded in 2011 by Scot Chisholm and Pat Walsh

Scot came up with the idea for Classy during a pub crawl he had organized to honor his mother, who had breast cancer. After the pub crawl he had trouble making an online donation to one of the largest cancer organizations.

He realized that the online donation process was outdated and frustrating. The goal was simple, make it easier for anyone to support a cause that was meaningful to them.

So he got to work.

The first product he launched was solving the exact problem he faced, an easy-to-use web based fundraising tool. He sold it directly to non profits so that they could offer an easier way for their constituents to donate online.

From there, he expanded into an end-to-end vertical SaaS solution for the space offering a whole host of products:

-Websites
-Donations
-Online and In Person Event Management
-Marketing & Email Campaigns

& much more...

Classy's GTM historically relied on a heavy inside sales approach. Cold outreach to non-profits via phone and email. They went the venture capital route to expand product offering fast and build a big sales engine to drive non-profits to adopt their solution.

Classy has raised $200M+ million in venture capital since its inception. The most recent round was a Series D in April 2021, led by Norwest Venture Partners. Scot has said how hard it was to raise money in the first 5 years. But, growth always solves all problems...

They continued to show incredible traction and a big breakthrough fundraise came in 2015. A Series B round with Mithril Capital and Bullpen Capital, enabled them to step on the gas and hit the hypergrowth button — growing to 10K+ non-profit customers and $1B+ in donations.

If Classy is the b2b platform for non-profits and giving, then GoFundMe is the b2c platform for consumer giving. In 2021, Classy decided to sell to GoFundMe for what I'd guess was close to a BILLY. The price had to have been right, as they sold just after a massive $120M round.

GoFundMe now has a monster business in the non-profit space, on both the b2b and b2c side. Rumors are they are north of $15B in donations which I would guess puts them in the neighborhood of $400-500M of annual revenue. Is an IPO soon?

The Classy journey is not just a tech success story but a testament to the transformative power of combining innovation with a passion for social impact.

Cheers to Scot Chisholm and the whole Classy team.

You built a beautiful vertical SaaS business and it's been fun to watch.

One ‘How To’:

Building An Operating Map For Your Industry

In the pre product market fit stage many founders forget to build an operating map of the type of businesses that they serve. In my opinion, this is the most important step to ensure you're solving a real problem.

Toast's S-1 had the best example of an operating map that I've seen:

Do you really understand your customer's lifecycle?

EVERY.

SINGLE.

STEP.

What do they go through from start to finish? Where are the points of high friction?

Very few early-stage founders have actually done this exercise and I’d highly recommend it.

One vSaaS Breakdown:

Horizontal vs. Vertical SaaS EBITDA Analysis

Have a product or service that could benefit our community of thousands of vertical SaaS founders, investors, and operators?

I’ve gotten a lot of inquiries lately and looking for the right partner from a company that can bring value to our readers.

If that’s you, click the link below:

Become A Partner