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FrontStream acquires GiftWorks and Artez Interactive

A year after getting into the nonprofit fundraising space, FrontStream Payments, Inc., announced two acquisitions to expand and increase its presence in the United States.

Lancaster, Pa.-based GiftWorks and Artez Interactive, headquartered in Toronto, Ontario, were snapped up in the past week. FrontStream Payments acquired the decade-old FirstGiving in August 2012. The Reston, Va.-based provider of integrated back-end merchant solutions and front-end payment and donation management products is backed by a group of investors led by New York City private equity firm Arsenal Capital Partners. Financial terms were not disclosed. FrontStream has offices in Brentwood, Tenn., Lacey, Wash., Chicago and Boston.

“The FirstGiving brand has secured our place as a full-service donation solutions provider for mid-tier nonprofit organizations, as well as a powerful back-end processing partner for a host of crowdfunding platforms in the United States,” FrontStream CEO Nina Vellayan said in a statement announcing the deals. “With Artez, we now have the opportunity to use our combined knowledge of merchant services, fundraising solutions and a strong API strategy,” she said.

FirstGiving offers a peer-to-peer fundraising platform that gives users access to donation tracking capabilities, social media integrations and data management tools. FrontStream and GiftWorks’ combined development resources will create a seamless integration that enables GiftWorks’ current clients to activate key donation processing features that, to date, were only available directly through the FirstGiving platform.
“This acquisition makes sense for us because the FrontStream and GiftWorks offerings each include key product capabilities that complement each other well and, together, will provide a much more comprehensive product offering to our nonprofit clientele,” Vellayan said.

With the acquisition of Artez, FrontStream plans to significantly increase its presence and impact in the United States. “Since our first entry to the U.S. market, Artez has been perceived as a vital alternative to the incumbent players,” CEO James Appleyard said in a statement.

Artez Interactive provides web, mobile and social fundraising solutions for nonprofits. Friendship Powered Fundraising is a complete system of technology, functionality, services and support that gives fundraisers and donors the ability to connect across the channels and media.

FrontStream will continue to maintain the GiftWorks brand with future plans to integrate the two platforms, improve scalability of the GiftWorks product, and develop more partner integrations to target the mid-tier market, according to GiftWorks CEO Steve Fafel. It’s a hybrid solution offered in a web-integrated desktop version or a hosted version and includes extensive donor and contribution management, event and volunteer management, reporting, and data analytics tools.

GiftWorks, launched in 2004, has about 15 employees. Fafel, who will become chief delivery officer in the new structure, estimated they have between 7,000 and 10,000 customers, ranging in size from small to medium. The acquisition grew out of partnership discussions with FirstGiving over the last four to five months, Fafel said.

Most of the more than 60 employees at Artez are based in Toronto, in addition to a small office in Lexington, Mass., and Australia. President Mark Sutton said the roughly 10-year-old firm serves about 500 nonprofits worldwide, primarily mid-sized and large organizations, most of which are based in Canada.

“What you’ll see is each of these platforms becoming connected,” said Sutton, who will become general manager of FrontStream Nonprofit, overseeing various functions across the companies. Combined, the three companies will be serving about 18,000 organizations, he said, adding that FrontStream processes about $4 billion in transactions annually. Payment processing has always been up to clients and they’ll continue to work with their payment partner of choice, he said, while integration of the Artez platform with FrontStream will be another choice for customers.

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