COLUMBIA — What began as a fundraising idea for a school’s Parent-Teacher Association (PTA) by one dedicated father has transformed into a technology startup that recently secured an impressive $750,000 in initial capital.
Jeff Spencer, co-founder of Playfora, successfully raised this capital from various sources in the current year, with a significant contribution coming from Comeback Capital, a Cleveland-based fund specializing in early-stage investments in companies located outside of conventional venture capital hubs like Boston, San Francisco, and Austin, Texas.
The Vision of Playfora
Spencer’s vision for Playfora is to explore the integration of charitable giving into an activity people already love – online bargain shopping. He has identified a niche online community where individuals engage in limited-entry, sweepstakes-style sales of high-value items through social media. For instance, instead of a single buyer paying the full price for a $1,000 watch, 100 participants each contribute $10 for a chance to win the item. This way, sellers achieve their desired sales price, and one lucky entrant acquires the high-end item at a fraction of its cost.
Going the Digital Way
While this contest-style selling exists, it is often labor-intensive, with sellers needing to manually communicate with hundreds of entrants. Playfora aims to automate this process, providing the necessary infrastructure for seamless execution. For instance, a Michigan-based country club selling sets of golf clubs in this manner witnessed a drastic reduction in the time needed to fill its contest entry forms, going from hours to less than a minute with Playfora’s assistance. Moreover, Playfora’s charitable mission allows organizations to passively raise funds during these sales, contributing 1 percent of each sale to charities such as St. Jude Children’s Research Hospital.
Jeff Spencer’s inspiration for Playfora evolved over time, driven by his desire to simplify school fundraising efforts. He sought to combine fundraising with activities people were already inclined to do and replicate this model for charitable organizations nationwide. However, initial challenges related to payment processing led to a pivot towards social selling.
Playfora employs blockchain technology to manage payments for each sale, converting dollars into tokens for smooth transactions while adhering to state and federal anti-pooling regulations. The platform has also addressed concerns about randomness in winner drawings by partnering with an external technology provider, Dublin-based random.org.
Sellers on the Playfora platform are required to complete questionnaires and participate in follow-up interviews to demonstrate their trusted online following. Additionally, all charities associated with the platform undergo vetting through platforms like GuideStar and Charity Navigator.
Playfora continues to innovate in the realm of online sweepstakes, aiming to streamline and enhance the social selling experience for its users while making a positive impact on charitable causes.
