One of the Valley’s fastest-growing startups just landed Arizona's largest funding deal of the year.
Phoenix-based Virtuous announced Thursday it closed a $100 million minority growth investment led by Pennsylvania-based Susquehanna Growth Equity. In a minority growth investment, a private equity firm typically provides capital in exchange for less than 50% ownership in a company.
Virtuous will use the significant infusion of capital to expand and upgrade its software platform that helps streamline fundraising, marketing and donor development processes for nonprofits. The funding enables Virtuous to accelerate the development of new features including AI tooling, expanded integrations, third-party data insights, and platform upgrades based on the needs of its users, according to a company release.
“We are incredibly excited to partner with SGE for this critical phase of our growth,” Gabe Cooper, CEO of Virtuous, said in a statement. “Their investment not only provides us with the resources to continue advancing our technology but also reinforces their belief in our vision to help nonprofits succeed. SGE’s team has a long-term mindset that will allow Virtuous to continue building an enduring business and putting our customers first.”
Virtuous will hire 30% more staff
In addition to product development, Virtuous plans to expand its customer success and service teams. As of May, Virtuous had 155 employees. Earlier this year, it hired Jeff Perkins as its chief marketing officer to build its brand and drive further growth, the Business Journal previously reported.
“We haven’t done headcount planning quite yet, but I would expect that we would continue to expand the team at around 30% of year and continue to create great tech jobs,” Cooper told AZ Inno on Thursday. “We are hoping to target some amazing Phoenix talent.”
Virtuous, founded a decade ago by Cooper, created a software platform that helps streamline fundraising, marketing and donor development processes for nonprofits. Some of its clients include Habitat for Humanity, Meals on Wheels and Catholic Charities.
Last year alone, Virtuous reported a 50% increase in annual revenue, Cooper told AZ Inno in May, though he didn't divulge specific financials. The company also launched two products: VirtuousBI, a data analytics engine to help nonprofits gain insights into donation and marketing information, and RaiseDonors, which provides enterprise-level tools to drive increased online giving.
What’s more, AZ Inno named Virtuous a “Startup to Watch” in 2023 and was the winner of the software category at the 2024 AZ Inno Fire Awards.
Virtuous has raised nearly $140 million in venture capital to date, Cooper said.
Virtuous’ funding round comes at a time when venture capital deals have not quite rebounded from pandemic-era highs.
Arizona companies inked 32 deals totaling $360.5 million in the second quarter, compared to 38 deals and $181.4 million raised in the second quarter of 2023, according to PitchBook’s Venture Monitor report.
Valley startups secured 29 deals totaling $248.9 million in the second quarter, compared to 32 deals totaling $173.7 million in Q2 2023.
Prior to Virtuous’ deal, Tempe-based biotech company Nectero Medical raised the greatest amount of capital in the second quarter with a $96 million series D round that closed in May.
