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The Indiegogo Life homepage.
The Indiegogo Life homepage. Courtesy: Indiegogo

Will Indiegogo’s new personal-cause site help it stand out in the crowd?

Dec 15, 2014

In the crowdfunding world, two of the earliest giants were Indiegogo and Kickstarter. Both sites can be used for purposes either corporate, such as the creation of a new product, or cause, such as charitable giving. But the difference is in their reputation: Indiegogo, arguably, attracts do-gooders (independent theatre productions; save your local bookstore), while Kickstarter has the flash (the Pebble smartwatch; the Veronica Mars movie).

Indiegogo's latest move cements that image further.

The San Francisco-based crowdfunding site announced on Monday the launch of Indiegogo Life, a website strictly for personal causes that will not charge the usual fee. (Indiegogo charges 4% for campaigns that reach their goal; 9% when a campaign does not.) The company lists "emergencies, medical expenses, celebrations or other life events" as potential use cases. Speed and ease are the main benefits. A campaign on Indiegogo Life should take just a few minutes and a few clicks to set up, the company says, which is of crucial importance in cases where a family or individual needs money quickly, say, to pay medical bills.

Over the years there have been a wide range of nonprofit campaigns funded on Indiegogo. In 2013, DC Comics (twx) took to the site to continue its "We Can Be Heroes" initiative addressing the hunger crisis in Africa; the year before that, a British man raised almost $100,000 to fund research for Alkaptonuria, or "Black Bone Disease," which afflicted his two sons. Campaigns like these will still appear on Indiegogo.com. The new site, which is wholly separate from the original Indiegogo, will only be for campaigns that raise money for individuals.

Danae Ringelmann, Slava Rubin, and Eric Schell co-founded Indiegogo in 2008 because each of them, in different areas (indie films; charity; and indie theatre), had seen a need for a way to circumvent the traditional routes to funding. The trio made Fortune's 40 Under 40 in 2013 and Indiegogo has continued to grow, along with main competitor Kickstarter (which launched in 2009) and the crowdfunding industry at large.

In a press release about the news, Indiegogo touts a 2012 campaign that raised more than $700,000 for Karen Klein, a bullied bus monitor in upstate New York. But Danae Ringelmann tells Fortune it was a 2011 campaign, the Pastor Marrion Fund, which raised money for a priest in the Congo to have a kidney transplant, that inspired the new site. "That campaign came out of nowhere and was a very wonderful surprise for the three of us," she says. "We always envisioned Indiegogo as democratizing capital, give people the power to fund whatever natters to them. But I think a lot of our experience was seeing it in the creative space, or in the arts. And it was still really early for us; we tended to know most of the campaigners on our site, and this was one of the first campaigns that none of us had ever talked to, it was just organic, it happened by itself. Then Karen Klein happened a year later, and it really showed the demand." The company says that since 2012, it has experienced triple-digit growth in the "personal cause" category, making this move a logical one.

It is also a smart one with regard to Indiegogo's competition. The crowdfunding space is exploding. Though Indiegogo and Kickstarter remain the leaders, there are hundreds if not thousands of smaller web sites and apps that have launched— some topically broad, some limited to narrow interests (call it "micro-crowdfunding"). One is the company Tilt (originally called Crowdtilt), whose CEO James Beshara told Fortune earlier this year that he predicts the entire space will become more focused on charity and causes. "Crowdfunding will move away from flashy products and return to the core needs," he said. Indiegogo may be making the same bet, wisely launching its first spinoff site in order to be one of the first in the space to place such a visible emphasis on this type of fundraising.

Rallying around individuals in need is something the Internet is fond of—look no further than the fantastically viral ALS Ice Bucket Challenge. Imagine an Indiegogo Life campaign as an Ice Bucket Challenge at the scale of an individual, rather than an association. (Interestingly, even though that movement was fueled by videos, Ringelmann says that for this particular customer segment, a video isn't as important as it is for other Indiegogo campaigns.) In the National Football League, one of the year's biggest stories, a positive one, in contrast to the swirl of controversy around player conduct issues, was Devon Still. The Cincinnati Bengals had cut the player but then re-signed him to its practice squad solely so that he could stay covered by the league's health insurance and thus afford the medical bills for his 4-year-old daughter who has cancer. You can imagine a father in Still's position—one who isn't an NFL player—taking to a platform like Indiegogo Life to raise the money instead.

Indiegogo has had a big year. In January, it raised a huge $40 million in a Series B investment round from a number of firms including Kleiner Perkins. In May, it raised another, undisclosed round from individual investors like Virgin's Richard Branson and the entrepreneur Max Levchin. Capping off 2014 with this announcement adds to the company's momentum. It also strengthens Indiegogo's theme of openness. In contrast to Kickstarter, which has an application process and turns some projects down, Indiegogo welcomes all campaigns of all types. The company says that its 250,000 funded campaigns make it the largest crowdfunding platform in the world. And yet, for now, Kickstarter still has the bigger name. Chalk that up to branding or the ineffable quality of appearing hip.

Indiegogo Life combats its biggest competitor while also showing heart. For Ringelmann, this new product launch was personal. "Two friends of mine, two years ago, their daughter was diagnosed with stage-four brain cancer right before the holidays, and it was very hard for the family financially," she says. "Suddenly they were $22,000 in debt and trying to save their daughter. The emotional burden of that all happened overnight. So my friends did an Indiegogo campaign and raised over $30,000—and very quickly. It meant a lot that we as a company could do something. And in general, the more we talked to people who were running personal fundraisers, the more we realized we could make our platform better for them."

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