Watsi Receives $1.2M in Funding to Push Forward the Nonprofit Tech Startup
Silicon Valley’s tech scene is often accused of being self-absorbed and unjustifiably confident that its ideas are good for the greater world. See: George Packer’s takedown of tech’s involvement in politics in the New Yorker. “The imperative to change the world has recently led some Silicon Valley leaders to imagine that the values and concepts behind their success can be uploaded to the public sphere,” he wrote.
What about nonprofit work for the greater good? The tech industry doesn’t have the strongest showing there, either. Though tech-savvy nonprofits like Kiva and Charity Water seem to be doing well, they remain on the periphery of the technology scene.
So it was interesting to see Watsi, a site that helps crowdfund medical treatments, steal the show at the last Y Combinator Demo Day, the high-status startup science fair at the end of the three-month accelerator program that has huge pull among investors.
During each break at Demo Day in March, the standard question to ask in the coffee line is, “Which did you like best today?” And this time, the answer I invariably got was “Watsi.”
While often the most-hyped YC startups raise $4 million seed rounds, Watsi obviously wasn’t going that route. It’s a nonprofit; it has no equity to sell.
But Watsi is announcing today that it has indeed raised a round: $1.2 million from Tencent, Paul Graham, Ron Conway, Vinod Khosla and other investors.
“There’s no expectation of return, but we want investors who hold us accountable,” said Watsi co-founder Chase Adam in an interview this week.
Watsi is a “100 percent” nonprofit, in the model of Donors Choose. All the money that people commit online for medical treatments is received directly by the recipients. Watsi pays for its own administrative, staffing and other fees with the funding it just received.
Other than the fact that it doesn’t want to make money, Watsi looks just like any other tech startup. It has a young team of six in San Francisco. It’s based around crowdfunding, like so many other new companies in tech. Patients’ personal stories are posted online, and donors add incremental funding toward their goals.
The company now has 16 partners, which include networks of hospitals around the world. It has funded 500 total patients in 16 countries in 11 months of operation.
$1.2 million is enough to keep that team going for the next 18 months, and to aim to triple that number in the next year, Adam said.
The funding also allows Adam and his team to not think about raising money for the next year and a half, unlike the traditional nonprofit model of having a division of the organization with their hand out at all times, he noted.
While Watsi is still the only (on-purpose) nonprofit that Y Combinator has ever accepted, Adam said he’s hopeful that it’s on the cusp of a larger movement.
“There’s a lot of young money in Silicon Valley,” he said. “As those people start to get older, they will start to get more philanthropic. But they’ll want to support nonprofits that operate like businesses they understand. And I think that could have a massive impact, on a global scale.”