Neighbourhood marketing platform Friendorse folds just six months after getting backing from media heavyweight

Pollenizer-backed start-up Friendorse has unexpectedly shut down, just six months after APN News & Media invested in the business.

In an email to its users, Friendorse said that it would be deleting all of its content and scrapping its site, adding: “We have loved working on the site and seeing the life that exists in Australian suburbs. Thank you for your support!”

The business has folded despite being receiving backing from media heavyweight APN, which took a 25% stake in the business back in January.

At the time, APN chief development officer Matt Crockett, who sat on Friendorse’s board, said: “We don’t want to 100% acquire a business too early in its lifecycle… We’re seeing if we can add value and then, depending on what happens, we will increase that stake.”

However, plans for further investment have gone up in smoke after Pollenizer, the Sydney-based start-up incubator that drove the idea after partnering with an initial, unnamed, investor, admitted defeat in Friendorse meeting its lofty ambitions.

Friendorse, which was created two years ago, was a neighbourhood-based community recommendations web service for local businesses.

An attempt to launch the business in the US, prior to APN’s investment, was aborted.

Mick Liubinskas, co-founder of Pollenizer, says that the incubator has learned plenty of lessons from its rare failure in the start-up space.

“The business proved itself in the early stages but it just didn’t scale,” he tells StartupSmart. “APN, like us, thought that localisation was a big opportunity and Friendorse had great support, which we’re very proud of.”

“We tried it in the US and it didn’t work, similar to other sites of the same nature. We then tried to focus it here in Australia and gave it our best shot, but a lot of start-ups are about getting the timing right.”

“We learned that people treat others in their location differently to friends they are connected to around the world. Mobiles are really changing how we interact. We were after a big, global play but it was hard to build critical mass.”

“We tried going through Facebook and then tried going through email, when it would’ve been better to go through one or the other, rather than splitting the options. Focus is key, really.”

Liubinskas dismisses concerns that the failure will deter APN, as well as other potential investors, from backing unproven Australian start-ups. APN hadn’t responded to a request for comment at the time of writing.

“APN has shown that it is committed to backing start-ups, so credit to them,” he says. “As the saying goes, you’ve got to invest in 10 start-ups and you may just get one success out of it. APN know that you play the long game with innovation and start-ups.”

“If anything, I think that it will encourage more investment in start-ups. The alternative for corporates is to run an idea themselves that has to fit into a five-year forecast and be de-risked. That costs them about $1 million, or they could invest in a start-up like Friendorse for a smaller amount of money.”

This article first appeared on StartupSmart.


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