Raleigh startup that makes software for PTAs around the country raises $3.3 million
MemberHub, a Raleigh-based startup that makes fundraising software for school-related nonprofits, has raised $3.3 million from investors, the company told The News & Observer.
The new round of investment, which was started well before the coronavirus pandemic wreaked havoc on the country’s economy, will be used primarily to add employees at the company, mainly in sales and software development positions, the company’s CEO, Will Bowen, said in a phone interview.
MemberHub, which operates out of the Loading Dock coworking space, has around 17 full-time employees and seven contractors. Bowen wouldn’t say how many more workers he would like to hire, though he noted that the company would be cautious for the next few months because of the coronavirus pandemic.
In the past two years, MemberHub has seen sharp growth in its customer base after tailoring its software for nonprofits focused on supporting schools, specifically PTAs and other booster organizations. The company has had success, Bowen said, in partnering with statewide PTA organizations that can then distribute MemberHub’s software to local PTAs.
The company didn’t always focus so closely on serving PTAs. But in 2016, after Bowen joined the company as CEO, he decided to move the company in that direction.
Despite the narrow focus, the company is still chasing after a pretty large market. Bowen noted that there are more than 110,000 schools in the U.S., and each of them has around three nonprofits connected to them, whether it is a PTA or an athletic booster club. For the school year 2015-2016, the Education Department reported there were around 132,000 public and private schools in the country.
PTAs and other school-related nonprofits use the company’s software and platform to organize parents, coordinate volunteers and facilitate donations. Bowen said 65% of all money now generated by K-12 school fundraisers comes in through cash and check.
“We make a custom e-commerce platform where [the PTAs] can take donations, sell spirit wear, raffle tickets ... and manage all of that instead of cash and checks,” Bowen said.
The company’s platform is free to use, but MemberHub takes a fee out of transactions done on the platform.
In June, the startup is launching a new service called Givebacks that will allow parents to buy things like apparel, meals at local restaurants and discount vouchers that will funnel a portion of the sale back to the nonprofit. That service, the company hopes, will significantly increase the number of transactions done on MemberHub.
VentureSouth, a South Carolina-based investment company, led MemberHub’s Series A round and invested more than $500,000 in the company.
It was the second Raleigh-centric investment VentureSouth has made in recent weeks. Last month, it announced it had invested more than $500,000 into Reveal Mobile, a location data startup also based in Raleigh.
Bowen said the two recent investments point to how strong the Raleigh startup scene has become in recent years.
Bowen declined to disclose revenue numbers for the company. MemberHub, he said, didn’t focus on monetizing its platform until last year. Before then all of its money went into expanding the platform’s capabilities and adding users.
But the company expects revenue growth to be strong thanks to its growing customer base, Bowen said. The latest round of funding, he added, should be enough to get the company comfortably through 2021.
“We are taking an aggressive approach to this fall, and it could require more capital,” he said. “But we are well positioned to get through 2020-2021” without raising more funds.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published May 13, 2020 at 5:30 AM with the headline "Raleigh startup that makes software for PTAs around the country raises $3.3 million."
