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NationBuilder raises $8M round to show community organizing can be big business

By Hamish McKenzie , written on June 7, 2013

From The News Desk

In the corridors of the Personal Democracy Forum (PDF) in New York these last couple of days, it has been clear that Jim Gilliam, the founder and CEO of community organizing tools maker NationBuilder, is a man above others. That's not just true because of his 6-foot-9 stature. Nor is it only because of his moving 2011 speech at this event that told his story of surviving two types of cancer and a double lung transplant.

It's also because he represents a rare species in the activist-heavy, nonprofit-oriented tech-political crowd gathered at New York University's Skirball Center. He's an entrepreneur who has grown a civic-minded startup from scratch and has raised serious venture capital. The company is on a tear, having grown to 60 people in the space of three years, and gathering more than 2,500 paying customers on its platform, which itself has been in operation for two years. It is now seeing 20 percent revenue growth month by month. Its customers have collectively raised more than $110 million on the platform.

NationBuilder and Gilliam himself are already proving to be examples for the PDF crowd; they have shown that business can be mixed with a social mission.

Yesterday, NationBuilder announced that it had raised a Series B round of funding that totaled $8 million. The round was led by the Omidyar Network – a global network respected for its socially conscious investing – with Andreessen Horowitz re-upping on its initial investment from last year's Series A round, which totaled $6 million. NationBuilder will use the money to scale its operation. Because it focuses on a community organizing model, which requires lots of leaders enlisting the support of large numbers of people, it is a capital-intensive operation. As well as working on the product, it will be hiring more engineers, nonprofit charity worker types, and a controller.

While the company's ultimate goal is to help community organizers of all types and levels, NationBuilder has so far been very focused on political campaigns. Logic might have suggested that the end of the 2012 US elections should also have marked a slowdown in the flow of political customers to the platform. That hasn't been the case. In fact, NationBuilder's political business is much busier now than it was even in the thick of the 2012 campaign. Gilliam says there are 500,000 elected offices just in the US, many of which previously couldn't afford the sorts of campaign tools that NationBuilder has now made cheap and accessible. The majority of the company's business now is coming from Mayoral and city council races. For instance, there was recently a special election for a city council seat in Washington DC, Gilliam says. All seven of the candidates used NationBuilder.

Clearly, there is a long road ahead for NationBuilder. It will face challenges in scaling, not least because of its people-heavy business model. The fact that it has had to raised $14 million in the space of a year testifies to the enormity of the pure logistical task ahead. So far, however, it looks to have a strong position in the market for attractive political campaign software. Update: A reader has pointed out that while NationBuilder has succeeded in building highly accessible campaign tools, it does not have a lock on the market. In fact, NGPVAN and Blue State Digital are the market leaders in the space. Salsa Labs is another major player.

NationBuilder's success in building accessible tools doesn't make it unassailable, but it will help – especially in the resistant-to-change political world. If it can replicate that success outside the US, the market opportunity is huge. Opportunities also beckon outside of politics.

In the meantime, Gilliam accepts that NationBuilder itself serves as a leader in the growing tech-political community, and it is a responsibility he has embraced. He mentions a study he read that found that the number one reason people leave a group is lack of leadership. He notes that while the Internet has been wonderful in terms of connecting people, a lack of leadership and tools has also squandered some of that collective energy. Recognizing the need, he is unafraid to step up.

“Our responsibility is to help grow that leadership capacity," he says. "There’s a vacuum of leadership in the world, and at a time when we need more. That’s how I think about my role here."

One metric for Gilliam's leadership will be in how many of his peers he can inspire to follow his lead. NationBuilder is part of a small group of civic-minded startups that are taking a strong for-profit line on the way it is attempting to fulfill its social mission, with Change.org, Causes, and Rally among its few peers. Much of the battle, one suspects, is in showing that it can be done. Convincing investors like Andreessen Horowitz and the Omidyar Network that community organizing is going to be a big business can only help.