Change.org Lands $15 Million From Omidyar
BY Sarah Lai Stirland | Tuesday, May 21 2013
Ben Rattray, the company's CEO, said that the bulk of the money will go into hiring additional engineers to build new tools, and to keep up with its growing user-base. It now has 35 million registered users, more than triple the 10 million that were registered a year ago. Individuals in 196 countries around the world started more than 500,000 petitions, which have covered everything from a high-school student successfully petitioning Pepsico to remove flame retardant from Gatorade to campaigns to save small regional schools in Thailand. Its internal statistics show that it is gaining three million users a month. The site currently employs 180 people in 18 countries. Twenty of those are engineers in San Francisco.
What's unusual about the investment is that the Omidyar Network isn't expecting an exit in the form of an acquisition or IPO, Rattray said in an interview. Rather, he wants to build the business to inspire other socially-minded entrepreneurs and investors at exponential growth is possible without traditional forms of venture capital. With its investment, the Omidyar Network has a minor equity stake, along with Uprising, a "mission-aligned" investment fund based in San Francisco. Rattray and other founding employees still own and control the majority of the company.
"Over time, while we will not have any traditional liquidity event, we’d never sell, we’d never go public, we’ll have some means of repaying investors," Rattray said in interview. "That’s part of what will develop the mission-driven investment market, and how we substantially increase the amount of capital available to mission-driven companies."
He envisions that means of repayment either in stock buybacks or dividends.
"[We] also want to demonstrate that it’s possible to build a business, focus on social change, and be able to run it at scale, and we hope to inspire other people, and frankly investors in this space," he said. "We think there is a big opportunity here, and we want to encourage that to happen."
Change.org is a B Corporation, which means that it's still a for-profit business, but has to meet certain requirements to be certified as a company that's just as concerned with social good as with maximizing profits.
In previous interviews, Rattray has said that he's thought about allowing the targets of petitions to respond directly to petitioners on the site. He's also discussed the idea of allowing petitioners to crowdfund for their causes.
Last month, Change.org added a feature called "Promoted Petitions," which allows individuals to pay varying amounts to advertise their petitions on the site.
The company also responded to criticism from the progressive community that its sponsored petitions encourage the propping up of astroturf campaigns by allowing people to flag campaigns as "hateful" or "misleading," according to a recent article in The Huffington Post.
Change.org began life in 2007, and has become the leader in a burgeoning field. MoveOn.org, with its 7.5 million members, has its own petition site called SignOn.org. Then there's Causes, which is backed by venture capital, not to mention the White House, which has its own policy-oriented petition tool. And as if to signify the growing popularity of Change.org's model, Howard Dean's political action committee Democracy for America debuted YouPower on Monday, another petition tool that also leverages the PAC's human organizing resources.