Investors flocking to group organizing sites
SAN FRANCISCO (Private Equity Week) - With e-mail lists, social networks and invitation sites growing at a healthy clip, it would seem the average user has an abundance of options to choose from among applications to organize clubs and group activities online.
In looking at recent funding activity, it's clear that angel and venture capital investors see room for improvement.
Over the past several months, investors have participated in new and follow-on funding rounds for a number of startups developing tools for organizing groups and events. Funding rounds range from several million dollars for Mollyguard, an event management site, to a few hundred thousand dollars for Groupable, a maker of a tool for connecting groups with sponsors.
The latest newcomer to shake up the group organizing space is GroupSpaces Ltd., a London-based startup that operates a website for managing and administering clubs and organizations. The company (groupspaces.com/) announced last week it raised $1.3 million in early stage funding from London-based venture firm Index Ventures and a consortium of angel investors.
The startup, founded by Oxford University students, started in 2007 as an application through which club administrators could manage tasks, such as sending out group announcements, organizing events, and handling transactions.
Co-founder David Langer estimates the site now has at least 300,000 unique users and handles more than a 500,000 memberships. And while it's playing in a competitive space, with rival offerings from much bigger and more well-established websites such as Facebook and Meetup.com, Langer said there's demand for the functionality GroupSpaces provides.
"The trend we're seeing is that groups are keen to carry out more of their administration online and using an increasing number of disparate, disconnected services to do this," he said. "This can become very time-consuming and inefficient."
Langer said a common concern for group administrators is when they have to juggle a mailing list on a Yahoo group, a membership database in Excel or a Google Doc, a Facebook site for organizing events, while collecting payments offline. GroupSpace's pitch is that it provides a single website through which a club manager can handle all of the above. Moreover, unlike Facebook or Meetup, individual group members don't have to join GroupSpaces - only the administrator.
Investors attributed part of the site's appeal to the over-scheduled pace of modern living and the need for better tools for organizing activities.
"Even for local groups, more demanding daily schedules of members require more sophisticated tools," said Chris Sacca, one of the round's individual investors.
Other investors in the early stage round included Dave McClure, Simon Levene, Meagan Marks, Ariel Poler, Quincy Smith, Stephen Bullock and Simon and Michael Blakey.
Langer said he plans to use the latest round of funding to add engineering staff, build out the product, and ramp up marketing. The company will make money, he said, from selling advertising and collecting a commission on payments transacted through its site.
GroupSpaces isn't the only company to raise money recently to build out an advertising- or transaction revenue-supported business tied to online groups and events management.
Just last month, Boulder, Colorado-based TeamSnap, which operates a website that allows users to manage sports teams and other activities, such as book clubs, raised $700,000 in a first round of funding from Denver-based venture fund eonBusiness and several undisclosed individual investors.
San Francisco, California-based Mollyguard, which provides online event management and ticketing services, raised $6.5 million in November, led by Sequoia Capital, according to Thomson Reuters.
Redwood City, California-based iGroup Network, which runs a site called Grouply for building online groups, raised $3.5 million to date, including $2 million in March 2009 from SoftTech VC, O'Reilly Alpha Tech Ventures and Western Technology Investment.
Also, Eventbrite, a San Francisco-based startup that operates a site for managing events and event transactions, raised $6.5 million from a group of 66 investors, according to a November regulatory filing.
There's more established competition, as well. Eight-year-old Meetup.com, has raised about $15 million in venture funding to date to build out is Web-based service for creating and organizing group gatherings. Backers of the New York-based company include Draper Fisher Jurvetson, Omidyar Network and Union Square Ventures.