# Tilt (2012 – 2017)

- URL: https://girisimcikafasi.com/en/startup-graveyard/tilt/
- Sector: Fintech
- Country: United States
- Total funding: $37 million
- Cause of closure: Acquired and shut down

## What did it do?

Tilt (originally Crowdtilt) was a platform that let groups of friends and communities collect money online for shared expenses, gifts, events or donations. Every campaign had a threshold, and the money was passed to the organiser only if that threshold was crossed. The company also offered an API so developers could build this infrastructure into their own apps.

## Why did it shut down?

Group collections were a business of frequent but individually small transactions, and commission-based revenue was not enough to cover the costs of a growing team. The company expanded its team on more than $37 million of investment and aimed for international expansion, but it never became profitable. In 2017 Airbnb bought Tilt for about $12 million in cash, for the team rather than the product. Airbnb shut the platform in June 2017.

## The story

The idea was born in South Africa. While working there as a microcredit collections officer, Wake Forest University graduate James Beshara designed a tool to make it easier for people to raise money for a shared cause. The first attempt was a donations platform called Dvelo; when users began using it for non-charitable purposes too, Beshara shifted the model towards group collections for parties, gifts and events. In 2011 Khaled Hussein joined as co-founder, the start-up took the name Crowdtilt, and in winter 2012 it was accepted into Y Combinator.

Growth came quickly. In May 2012 it raised $2.1 million from investors including SV Angel, CrunchFund and Reddit co-founder Alexis Ohanian. A $12 million Series A led by Andreessen Horowitz in April 2013 took total investment to $14 million, and a $23 million Series B in December 2013 pushed it above $37 million. The platform's logic was simple: every campaign had a “tilt point”, and no money was released until that threshold was crossed. Stories such as the Jamaican bobsleigh team's campaign for the Sochi Olympics, which aimed for $80,000 and passed $129,000, made the brand known; the company shortened its name to Tilt and struck a partnership with ESPN Fantasy Football to collect league fees.

But the glowing stories did not turn into a solid business model. For a time Tilt charged organisers a commission of 2.5 per cent of the money collected; group collections consisted of frequently repeated but individually small transactions. The capital raised to grow the team and expand abroad created a cost structure that this revenue could not cover. The company never became profitable.

In 2017 Airbnb bought Tilt for about $12 million in cash. It was an acqui-hire: what interested Airbnb was not the product but the engineers on the team. The platform was shut in June 2017. Fast Company described the outcome as a bargain for Airbnb and a classic loss for investors such as Andreessen Horowitz.

Tilt's story is a reminder that a product users love, and that easily wins media coverage, is not on its own a sustainable business. A payments product living on a few per cent of commission from small transactions cannot become profitable without enormous volume, and rapid growth before reaching that volume can turn the exit into a cheap acqui-hire.

## Lessons

- If you are building a payments product whose revenue rests on commission from small transactions, work out from the start the transaction volume needed to turn a profit, and tie your hiring plan to that volume.
- Viral campaigns bring awareness but not recurring revenue; track how often an organiser comes back to the platform as your core metric.
- Scaling up funding rounds before proving unit economics can turn the exit into an acqui-hire worth less than the money raised.

## Sources

- [Tilt.com](https://en.wikipedia.org/wiki/Tilt.com)
- [The Demise Of Tilt: A Bargain For Airbnb, A Classic Loss For Investors Like Andreessen Horowitz](https://www.fastcompany.com/3069164/how-tilt-veered-off-course)
- [Airbnb finalizes deal to buy social payments startup Tilt](https://techcrunch.com/2017/02/22/airbnb-finalizes-deal-to-buy-social-payments-startups-tilt/)
- [Popular Group Funding Startup Crowdtilt Raises $23M In Series B Round](https://www.forbes.com/sites/alexkonrad/2013/12/16/crowdtilt-raises-23-million-series-b/)