The successful e-commerce platform that features independent makers went public in April, and is now expanding its reach to include financing tools. A pilot program called "Fund on Etsy" allows sellers to raise money on Etsy's website to bootstrap the manufacture of new products.
Etsy calls the project "crowdfunding for production."
"Fund on Etsy fits in seamlessly with sellers' business lifecycles, from ideation to product creation to financing to retail and even to wholesale," said a spokeswoman for Etsy. "Fund on Etsy gets at another need—financing and product development," she said in an email to CNBC.com.
The Brooklyn-based company, which features some 20 million buyers on its site, will pocket its standard fee of 3.5 percent of each transaction plus a 20-cent posting fee.
Crowdfunding is a broad financing trend that allows individuals and ventures to raise many small amounts of money from a large number of individuals to reach a financial goal.
The finance model has gained popularity as the demand for creative handmade products has grown. Shoppers are seeking the story behind the goods they buy because the knowledge of the product's evolution and makers feels cool and "insidery." It makes consumers feel special. (Of course you wanted a handcrafted, wooden cheese board in the shape of your home state.)