Crowdfunding Platform RocketHub Acquired for $15 Million
In yet another sign that the crowdfunding industry is maturing, one of the first crowdfunding platforms to launch in the U.S., RocketHub, has been bought by entrepreneurship resource center EFactor in a deal worth $15 million.
New York City-based RocketHub, which operates in over 190 different countries and regions, will continue to exist as its own brand under the EFactor umbrella.
For RocketHub, which launched in January 2010 and has not raised more than $400,000 in capital in its history, the deal is a significant financial win. With the money, RocketHub will grow and add on to its existing suite of products, says co-founder Alon Hillel-Tuch.
“We are by no means going away. It is the entire opposite. We are actually going to be more in everybody’s faces than ever before,” Hillel-Tuch tells Entrepreneur. “It’s not that RocketHub is disappearing. It’s being acquired and then basically [being] fed steroids.”
The philosophy of joining with EFactor, an online resource center for services for entrepreneurs, is that entrepreneurs will be able to raise money and also get access to mentorship in the same place, says Hillel-Tuch.
Raising money on a crowdfunding platform indeed opens the door of possibility for so many startups. But startup money alone won’t build a successful company. “The typical funding platform will help you get money and send you on your way. And that will not be the case for us, and that’s what excites me,” says Hillel-Tuch.
EFactor is technically incorporated in Nevada is based in New York and has 1.5 million members in 196 countries. The platform helps entrepreneurs helps its community of entrepreneurs get their questions answered, whether that’s about marketing, social networking or mentoring.
For EFactor, the deal means expanding the services it can offer its members. "Our acquisition of RocketHub is the launching point of our ability to service entrepreneurs with needed content, education and financing options such as crowdfunding all of which are offered by RocketHub," says Adriaan Reinders, EFactor’s CEO, in a statement announcing the deal.
Beyond the RocketHub-EFactor synergy, the $15 million acquisition marks a milestone for the crowdfunding industry as a whole. “There is a lot of motion going on in the industry, a lot of people are figuring things out,” says Hillel-Tuch. “You are finally seeing a platform become more than just a product. It’s becoming a full community with services and that’s very new in this space.”
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.