After raising about $3 million in pre-seed and seed funding, Gravyty, the Boston-based startup that uses AI to assist nonprofits in fundraising efforts, has scored $21 million from a single investor.
K1 Investment Management, a Californian investment firm focused on high-growth enterprise software companies, announced the funding Monday. Already, K1 has a portfolio of software startups that focus on "social good;" in Gravyty's case, that includes higher education institutions and nonprofits across industries.
Gravyty CEO Adam Martel said that because Gravyty is "almost profitable," the company had been courted by a number of different private equity firms and venture capitalists. But none of them had the kind of familiarity with nonprofit tech that K1 did.
"It's wild," Martel said in a phone call with BostInno Monday. "To go to $21 million with one investor is just wild. You know, when you know great people, when you know these folks who understand this space so well, it was just a no-brainer."
The funding will be used to expand Gravyty's presence in Boston and bring Gravyty's software to an even larger customer base. Within the next 12 months, the company plans to hire across the sales, marketing, tech and customer success departments.
Gravyty has certainly come a long way since its founding in October 2015. When the company first spoke to BostInno in July 2017, it had nine employees. Today, Gravyty has 24 people on its team, and the company says it empowers thousands of frontline fundraisers at nonprofits, colleges and universities, hospitals and health care organizations.
Martel noted that prior to K1's investment, and with the exception of handful of angel investors, all of Gravyty's funding had come from Boston-based sources. Christopher Mirabile, managing director at Boston's Launchpad Venture Group and chair emeritus of the Angel Capital Association, sits on Gravyty's board. And both Martel and his co-founder Rich Palmer are graduates of Babson's MBA program.
"We're so grateful," Martel said. "Rich and I come from blue-collar backgrounds. So this is not just life-changing for the company and the market, it's also life-changing for us and our families. Sometimes I think that gets lost in the headline of how much people raised. Going from nothing, from a fundraiser at Babson, developing this there, to having the opportunity to work with such prestigious angels in Boston, and finally getting to the point where we can accelerate this thing and grow it past a small seed—that only happens with great folks and a great ecosystem. Boston is truly the best place to build a company."
