How one of Startmate’s worst start-ups Sitemate won over investors – Michmutters

How one of Startmate’s worst start-ups Sitemate won over investors

It was in the same group as Morse Micro, and Mentorloop, and Mr Pike said the cracks in his business quickly became apparent.

“Nick and I formed a pretty close bond, but it was a weird relationship because while Nick had a lot of belief in me personally, he had some major concerns about the business,” Mr Pike said.

‘existential concerns’

“Sitemate was the company he was most concerned about from the cohort. We were probably the worst company in nearly every measurable and immeasurable metric. We had a founder break-up and the product barely worked, but now we’ve been stable for a few years.

“We rebuilt the culture internally, restructured the founding team, and we started chipping away.”

Despite the “existential concerns”, Mr Pike said he kept building the business because the early traction from the company’s first 20 customers was strong.

“There is blind hope, and then there is logical hope. There is a fine line between those things,” he said.

“Looking at it from an outsider’s point of view, things looked pretty bad. But, we looked at it qualitatively – were people using our product? Yes, they were requesting more features, using it more every day and using it to its limits. We knew we may as well see it through.

“But there’s a lot of zombie start-ups out there who have spent money building things no one is using, and that’s a different situation.”

After graduating from Startmate, Mr Pike emailed Mr Crocker monthly updates on how Sitemate was tracking for four years.

Shortly before COVID-19 struck the business found its groove. And then the pandemic propelled the adoption of digital tools among its customers including Lendlease, Downer, Fulton Hogan and Arcadis, which use Sitemate across a variety of projects.

The company now has almost 1000 customers, has expanded to Britain and is in the process of setting up an office in North America.

On the back of its newfound success, in December last year the company kicked off conversations about a capital raise with Blackbird.

“Blackbird principal Tom Humphrey has joined the board, but it was the relationship with Nick that laid the foundation and this feels like coming full circle,” Mr Pike said.

New investors

Blackbird’s cornerstone contribution to the $5.2 million round was locked in three months ago. Since then, the company has also secured funding from existing investor Shearwater Capital and angels including local tech founders Tim Doyle, from Eucalyptus, and Propeller’s Rory San Miguel.

“It is a product-led company bringing real-time collaboration and a seamless product experience to the hundreds of millions of workers who wear hardhats and steel capped work boots – just like Atlassian did for software developers and software companies,” Mr Humphrey said.

Mr Pike would not reveal the company’s valuation, but said it was about five times higher than its previous seed round, which closed shortly before COVID-19 hit.

Having had a rocky start to life, Mr Pike said no investors wanted to fund the business in its early days, so the company was forced to operate profitably and run on a lean budget.

He intends to return the business to break even quickly. But, he said he would consider raising another round at a later date.

“Even though we’ve done this round, it hasn’t changed our DNA,” Mr Pike said.

“The plan is to deploy the funds rapidly – ​​setting up our go-to-market offices and doubling our product and engineering teams – but we’ll be back to break even within 12 months and in a position to decide what we want to do next. We will not be reliant on future funding.

“That was the plan even before the crash. We think you get better results [when you’re capital efficient] and you’re less lazy.”

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