Virtuous Software, a Phoenix-based startup that makes a customer relationship management platform for nonprofits, announced on Wednesday that it raised $18 million in series B funding.
The Virtuous platform helps nonprofits streamline their fundraising, marketing and donor development processes to ultimately create a more personalized relationship between nonprofits and their donors. Current Virtuous customers include Habitat for Humanity, Meals on Wheels and Catholic Charities.
Gabe Cooper, founder and CEO of Virtuous, said the company had not planned on raising money until later this year, but its rapid growth pushed that timeline forward.
“The market was moving so fast, we were growing so fast, there was so much demand, that raising a little bit earlier than anticipated, it was going to help us keep up with growth,” he said. “There's a lot of investors looking for good deals right now and a lot of passion about what we're doing.”
The round was led by Atlanta-based Fulcrum Equity Partners with participation from existing investors MATH Venture Partners, Seven Peaks Ventures and PHX Venture Partners. Virtuous was founded in 2014 and previously raised a $3 million series A in 2019 and a $2.2 million seed round that closed in 2016.
The company has a headcount of 54, with seven new employees set to start in the coming weeks. Cooper said the new funding will primarily be spent on hiring more people, especially in the product and customer success teams.
Cooper said hiring is challenging right now, and that several of his fellow Valley founders are also experiencing this issue, but he said the company’s mission helps them stand out for job seekers.
“One of the unique things that we can offer is, you get to be a part of a cutting-edge tech company and make a good living,” Cooper said. “But you also get to have what you do during the day connected to a mission that's bigger than you.”
Charity changes
The Covid-19 pandemic cast everything in a new light and forced people and companies to reevaluate how they move through the world. For nonprofits, the pandemic forced them to rethink their purpose and how they go about raising money.
In particular, many nonprofits had previously relied on in-person events to woo big donors. As the pandemic shut down fancy gala dinners and other lavish events, nonprofit fundraisers told the Virtuous team that shifting away from parties helped their teams refocus on the causes driving their work.
At the same time, donors were also opening up their wallets more freely during the pandemic. A study by Bank of America and the Indiana University Lilly Family School of Philanthropy found that about 90% of affluent Americans gave to charitable causes in 2020, and about a third of them increased their donations to basic needs charities.
The Virtuous platform gives Cooper and his team insight into giving patterns and he said both major and smaller donations picked up in the past year.
“You saw more of those [middle-income] people step up and get for the first time,” he said. “It's one thing to have the super wealthy be more philanthropic, it's great, but it's another to see just whole communities raise up and give more sacrificially.”
