Fundraising marketplace FarmRaiser has spun off a stand-alone product and rebranded as RaiserHQ.
“We are transitioning from a product-enabled technology company that does healthy fundraising to an actual software company selling [software-as-a-service] B2B software,” founder Mark Abbott said. “FarmRaiser as a name is meaningless in that world.”
Abbott founded FarmRaiser in 2015 in Arlington and initially only focused on farm-grown products for schools. It functioned like a farmers market where schools could sell fresh produce to raise money.
Abbott saw the challenges that nonprofits, especially schools, face when fundraising. Many sold products like popcorn or coffee outside of grocery stores or door-to-door. They were not able to take advantage of online opportunities.
The same was true of the hundreds of companies that offered products for sale for fundraising activities. Over time, the company grew beyond just being a farmers market for schools and became a full-fledged platform for companies that offer products to nonprofits and schools for fundraising activities. Groups raising money can choose a product and offer it for sale through the marketplace.
Over the years, several of FarmRaiser’s larger customers inquired about a stand-alone product rather than a public marketplace, Abbott said. Some of these customers can have a hundred fundraisers running on the platform at any given time. They wanted to take advantage of the platform’s back end and other tools that were not available within the marketplace.
“We came together to solve this problem of fundraising being unprofitable and unhealthy,” Abbott said. “We ended up creating the backbone, the technology of our company.”
The company, which relocated to Richmond in 2020, raised $364,000 in a pre-seed round in 2015, and another seed round of $198,000 in 2016, according to Crunchbase. The company raised an additional $1.5 million Series A in 2021 from Atlanta’s 1219 Capital Partners and several other investors, according to Securities and Exchange Commission filings and Crunchbase. Abbott said the Series A was to fund the stand-alone platform and market the product to companies that specialize in selling products to nonprofits for fundraising.
“What we realized is that the value of what we created for our shareholders is not in healthy fundraising, that’s important for everyone, but the value in what we created is the software,” Abbott said.
The rebrand as RaiserHQ is part of the process. The new name creates an umbrella organization where the SaaS product and the marketplace can be housed. Abbott said he can see other marketplaces besides FarmRaiser being created in the coming years.
The company has four clients on the SaaS platform and Abbott hopes to have 20 to 30 by the end of the year. He is looking for the platform to do between $2 million and $10 million in sales this year but did not provide overall sales figures for the entire company. Most of the company’s revenue is on transactions. It takes a small percentage of each transaction.
Abbott said one of the biggest challenges right now is learning the best way to sell an enterprise software product. The company used social media and other marketing tools to get companies to list products on the marketplace, but Abbott said getting a company to incorporate a software platform into their entire business operation is a different problem. Each company has different processes and ways that orders are generated.
Abbott said the company might look to raise more money this year as it rolls out the SaaS product. RaiserHQ currently has four full-time employees and a few contractors.
“We have been talking to investors quietly,” Abbott said. “We are looking to start more forcefully showing the data and what we’ve done.”
