Started in November 2014 by Chet Jain
and Chaitanya Atreya
started as a free crowdfunding
and online fundraising platform. After a successful year of operating in beta version in the US, Crowdera’s platform was offered to Indian fundraisers starting November 2015.
Since then, Crowdera has helped raise crowd funds for over 2300 campaigns and projects in India. In a conversation with ET Online, Chet Jain talks about Crowdera’s journey, why crowdfunding can make a difference for India’s SMEs and why non-profit organizations and individuals from over 200 countries have embraced the platform. Edited excerpts:
ET: How has Crowdera’s business evolved over the years and what is the business model now?
Chet Jain (CJ): Crowdera started like a philanthropic initiative to give back to the society. We wanted to provide a platform that helps people raise funds through crowdfunding without losing a sizeable portion to commissions or without any dipping into donor dollars. This aim gave birth to the idea of Crowdera- world’s first free fundraising platform (crowdfunding platform).
Even today Crowdera remains a free crowdfunding platform. It does not charge any commissions and does not even accept any voluntary tips from the donors – it’s a totally truly free fundraising platform.
Over a period of time, we listened to post-experience feedbacks from users like non-profit entities and other fundraisers who requested certain features that could amplify their fundraising initiatives for better results or make the process of fundraising easier. We incorporated suggestions and that is how business at Crowdera evolved.
The new advanced version of the platform offers premium features and proprietary tools like team fundraising that help the non-profits to amplify their goals and quantum of fundraising significantly.
Other premium features and toolkits like Donation Receipts allow the non-profits to upload information and send thousands of donation receipts simultaneously – all receipts customized with their logos and compliant with the specific donor’s country’s regulations. We have built location, geography and jurisdiction agnostic set of tools scaled up globally covering numerous countries.
The platform works on freemium SAAS Model. Paid subscribers get access to premium features for nonprofit fundraising. Since we have limited bandwidth, we currently provide help to only select few customers.
We also support corporate giving. Since we work with several non-profit entities, we leverage our features and tools to help corporates manage their CSR initiatives and employee engagement. In a nutshell, Crowdera loops in free crowdfunding, online fundraising, team fundraising, compliance management and corporate giving into a single value chain on a platform-based model.
ET: Of all the countries that Crowdera operates in and others where it has partners, where do you see the most perceptible impact in terms of funds being raised to finance a cause?
CJ: The US remains to be the leader in this space where we directly operate. We are also focused on India substantially for 2019-2020 and in the coming years. We see a lot of impact coming from USA and India. Recently, we have started our operations in Singapore, and we plan to support other South Asian countries to increase the impact on this side of the world specially from the standpoint of funds being raised. From other countries, depending on where we are partnered, some European countries and Pacific regions also can potentially see some impact.
ET: How has business progressed in India and what is the potential in the country for what Crowdera has to offer?
CJ: India is an interesting case. Initially a giving back geography for us but surprisingly, most of our first paying customers using the features and tools on our platform came from India. I do see a lot of evolved set of customers who are willing to pay for technology that can amplify their fund-raising results and simplify their life with the processes that incorporate into the platform.
ET. Is there certain type of cause/idea/innovation that tends to do well on a crowdfunding platform?
CJ: When we talk of crowdfunding platforms – P2P kind of model, we do see anything which is a short-term cold driven, purpose driven kind of campaign that can see some immediate result in terms of making an impact on anyone’s life- such campaigns go really well in P2P platforms. It could be emergencies, even a startup experiment or a film making project. Non-profit campaigns need more structured fund-raising efforts for online fund raising. And that’s the reason we built the new generation of Crowdera – it brings that required structure into the fund-raising. For non-profits, just a regular crowdfunding platform may not serve as a permanent or a long-term solution. They need more features and tools that can customize fund raising for them.
ET: How can small businesses in India benefit from Crowdfunding?
CJ: Innovation driven small business initiatives can certainly benefit from crowdfunding. In our experience, people find it difficult to connect with services driven initiatives. It is after all about connecting crowd with the emotions that you shared with them and once you have the right set of supporters who share the vision/emotions, you will have support. It is easy for a product or certain innovations or a dream to connect with people. Whereas, if you are talking about building a solution to raise a certain amount of funds, I do not see that kind of project taking off in a big way.
ET: What role can crowdfunding play to support the Indian economy?
CJ: I believe crowdfunding, and not just standalone crowdfunding, but together with Fintech companies in a structured manner, can make a substantial impact in Indian company. This industry is potentially becoming a very strong alternative source of financing for causes and dreams of people.
Yes, there are other fintech organizations like micro-finance companies to help the business initiative. But, the donation based crowdfunding model is a resource where small needs can be very quickly identified and find support to raise money and show immediate gratitude as well for the donor. Think of this from a standpoint that businesses are not knocking the micro finance and the banking doors for their small, micro needs.
This alternative front is definitely infusing lot of money into the Indian economy and many businesses are getting a significant support. Like film-making can substantially benefit, similarly, small businesses, product focused businesses, startups can benefit from crowdfunding, which in turn can boost the economy by creating jobs. Similarly, non-profits as well can create simplicity in the fund-raising processes, so that they can focus more on what they are actually doing and bring sustainability in the processes potentially adding more jobs for the Indian economy.
ET: Equity crowdfunding is not allowed in India and there exists some gray areas in terms of policy. Do you think regulatory uncertainty is preventing crowdfunding from being effective in India?
CJ: If you look from Indian SMEs IPO standpoint, there is already something defined by regulatory authorities in terms of how people can crowdfund. SME IPO is also a kind of crowdfunding initiative and there are certain set of rules and regulations that one can follow. It is certainly for a smaller set of companies. I am sure there are a lot of efforts going on to figure out how do we bring regulations into the crowdfunding industry for raising money as capital or security.
I don’t know how soon that would happen, but there is uncertainty which is creating confusion and startups are leaving India for the US and Singapore to get equity crowdfunding. Yes, there is a little bit of impact, but I think India should take its time to evolve. To ensure the interests of the investors are protected, regulatory authorities will have to come up with some good set of rules. I am sure that would happen in the coming months or may be a year or two. We hope to see some interesting things happening in India.
ET: Crowdera Foundation launched a startup grants program – in partnership with Amazon AWS. What are the details of this program?
CJ: Thrive5 Programme is the need of the hour. We realised that a lot is happening in the space of accelerators, co-working spaces, incubators. Where organisations have their purpose defined when they are starting a company, such organisations tend to do well. But many other organisations know what and how to do stuff but they don’t know why they are doing stuff. The purpose of our Thrive5 programme is to ensure that we help startups identify their “why” they are doing their thing.
Through Thrive5 we will be providing a co-founding mentor who would be acting like the chosen organisation’s co-founder. The mentor, with their expertise, will help founders to define the “why” of their product or startup. And with that “why”, it potentially would become easy for these founders to define the “hows” and the “whats”.
Apart from the co-founding mentors, Thrive5 also provides tools and resources which startups need. Our goal is – whatever money can buy, how do we get those things to the startups. They bring in their passion and vision. We can help them refine everything and we will give them all the tools and resources to build great companies. The programme aims to make them ready for institutional money.
The startup founders who apply for the programme would initially spend 2-3 months’ time using all the tools and resources we offer till the Demo Day. On the demo day, a group of startups would be shortlisted for funding. If shortlisted,Thrive5’s VC and Angel Partners would fund them as well. We anticipate each round could potentially fund between 25k to 50k USD for each startup.