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- Wefunder Explodes.
Ain’t no way to slice it, 2023 was a bad year for startup investing.
Every chart indicated a huge drop in funding.
But we’re now halfway through 2024, and seeing signs of life.
Wefunder must’ve teamed up with Mozart to release a symphony of melodic metrics. It was an amazing Q2 for the funding platform, and I’m going to break it down for you.
Let’s get into it, after we check out a few exciting startups that are raising:
NEW STARTUPS
Startups that you can invest in with as little as $100 right now:
🔴 Circuit City - …yeah, that Circuit City (LINK)
🎟️ PromoTix - Ticketmaster, if they didn’t charge exorbitant fees (LINK)
🔥 Red Line Safety - Firefighters are getting wearable tech (LINK)
WE HAD FUN IN Q2.
Wefunder set some records in Q2:
Quarterly Revenue - $5.2M (all-time high)
Quarterly Profit - $1.7M (all-time high)
Revenue was through the roof, and even more impressive is that they were able to reach an all-time high without cranking up marketing or other costs.
In fact, Wefunder made some difficult cuts to both personnel & overhead.
Nick Tommarello, Wefunder’s CEO, commented that the layoffs in 2023 had some unexpected outcomes.
After our layoffs, we moved faster. When our engineering team dropped in half, we shipped more. The extra process required for larger teams adds inevitable friction.
Taking a look at Wefunder’s revenue, I’m actually in awe.
Up until 2023, there was strong momentum upward.
$1M → $2M → $3M in Q2 revenue.
Wefunder stumbled in Q2 of 2023, with declining revenues of $2.3M reported.
But they more than made up for it in 2024, sales increased 129% and it was if the bad 2023 Q2 had never happened.
$1M → $2M → $3M → $2.3M → $5.2M
2023 now looks like a blip - Wefunder continues its upward trajectory in 2024 as if nothing happened
$5.2M, and it passes the eye test too. Wefunder was releasing more startup deals than any other platform I tracked.
In the ‘new startup’ section at the top that I curate each week, I found that the overwhelming majority of companies in the past quarter were hosted on Wefunder.
The caliber of startups also leveled up - I count 5 companies that raised over $1M in funding on the platform: Beehiiv, SwingVision, Levels, Sircles, and Hard AF Selzer.
FEWER HORSES IN THE RACE
What’s happening behind the scenes, is that Wefunder is outcompeting its rivals.
If you look at the market share, Wefunder has always had an edge in the Reg CF space.
It has vied for dominance against StartEngine and Republic, and consistently etched out a 30-35% market share.
Republic has fallen off in recent years, dropping from 20% share all the way to 6%.
Republic’s declining market share has not gone toward Wefunder/StartEngine
Tommarello remarked that the field has narrowed into a two-horse race between Wefunder & StartEngine.
While I agree that Republic has become less of a threat, I believe new ones are emerging.
White-label platforms like DealMaker and Issuance continue to compete at a high level and could spell trouble for Wefunder in the future.
LOOKING AHEAD
Tommarello laid out his hopes for the near future.
Chief among them, is a major overhaul of the Wefunder app.
The Wefunder app has dragged down the company for far too long. It’s slow & glitchy, and it’s become so bad that Wefunder actually yanked it from the app store.
Tommarello expects to unveil a brand new Wefunder app, but it might not be coming right away. Wefunder is looking to hire a head of product design (if you know anyone, holler at me), which they’ll need to build out the app.
Wefunder also alluded to more social capabilities to drive conversation and allow people like me to build a following on the platform (timely plug to ask you to follow me!).
A.I. was (of course) mentioned, although the details on how this would be implemented into the platform were (of course) vague.
Lastly, Tommarello cited Venture Fund as a key area of growth moving forward.
This part of Wefunder is only available to accredited investors, it’s essentially a place where people can set up their own VC Fund and accept investments.
FINAL THOUGHTS
An interesting nugget in this update was the company’s insight on the European market.
Wefunder is greatly reducing its focus here, citing that Europeans only invest at half the rate Americans do (happy 4th yall).
One thing that was NOT mentioned in the report was Wefunder VIP.
This program was rolled out in mid-2023 to rival the premium membership tier that StartEngine offers.
StartEngine makes an absolute killing with their premium membership, so it was exciting to see Wefunder release their version.
However, Wefunder put very little marketing behind it and its noted absence in the Q2 report makes me believe that there is not significant traction behind it.
A potential smudge on an otherwise amazing quarter.
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