I couldn't find stats for GoFundme, but Kickstarter was able to raise $529 million in 2014. [0]
Personally, this buyout does not make sense.
At very late stages, a company valuation is usually a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization). The valuation (which is different than market cap, but we'll conflate the two for sake of explanation) in very late stage, non-growing companies, during times of slow economic growth is around 5-7x. If a company is growing quickly at the later stages (read: exponential growth curve) its P/E ratio (price/earnings ratio) could be, we'll say, 100 on the public markets (100x). That's really high, and would rarely happen unless the economy has really low interest rates (meaning less good places to put your cash, and you need to invest it somewhere anyway).
So, in other words, we give the company the benefit of the doubt and say they'll be worth 30x EBITDA. That means they'd need to bring in about 20m in one year, which is about 400m in total donations. High for sure (the buyers must really believe in them), but not completely unreasonable. If, on the off chance, they start bringing in 1B in donations, and their take is 50m, the investors will earn a great multiple on their investment. That's probably what they're hoping for.
You are saying that the purchasers have broken even on the deal so long as they have not lost money on paper in the valuation since they can probably either borrow against it or sell it off.
It comes down to are you paying for current value, or potential growth in value. Frankly, in my opinion, markets that rely upon a greater fool to bail you out to make your money rather than just getting it back the old fashioned way by providing a good or service are way too frothy.
Counter-argument is that you are betting on growth, not a greater fool bail out. In this instance the only way to get that growth while still handling less than 12 billion in transactions is by increasing their take from 5% to something higher or adding on ancillary sales. I'd bet on ancillaries, but this isn't my space.
By the way for those reading who may not know, I was referencing Greater Fool Theory, not making a pejorative statement (heh, beyond what the theory itself may make). https://en.wikipedia.org/wiki/Greater_fool_theory
I actually found the numbers and Gofundme brought in $470M in 2014, which is actually a bit more than Kickstarter. So, $23.5M in revenue.
I don't know what the costs of operating a crowdfunding site are but I don't think that the valuation could have been less than 30X EBITDA.
But yeah, with $23.5M in revenue and with such a fast growing market, a $600M valuation doesn't seem as crazy as I thought. I personally don't think that the company will ever make $600M in profit, but hey, as log_n puts it, for now they can still look for a greater fool.
Because you get any money donated regardless of if you reach your goal, it's a bit different than KickStarter (?). Those same people are the people who I now write off as moochers, because it's always something to personally benefit them.
For example (and this is a sad one): someone was asking for donations to help her get her back fixed so she could live a normal life. Health insurance wasn't covering it. She claimed she was broke.
The last 6 months she's been going to every major music festival.
The more things change, the more they stay the same. :D
Kickstarter's search volume is 2x-3x.