Australian tech giant Seek has invested more than $1 million in Melbourne startup Sidekicker in exchange for a minority stake in the company.
The exact amount of funding is undisclosed but ranges above $1 million and will be used to grow Sidekicker’s two-sided marketplace for on-demand workers and further invest in its team.
Sidekicker co-founder and CEO Tom Amos says Seek is the perfect partner to help his startup achieve its aim of giving people more control over their lives, better manage their work and help the way businesses hire.
“The reason we chose Seek was because they can give us the ability to achieve our goal of being the largest supplier of hourly and daily staff in Australia,” Amos tells StartupSmart.
“We were very lucky from both our points to find a partnership that everyone felt really comfortable with.”
Amos and co-founder Jacqui Bull have grown their workforce of “sidekicks” to more than 3000 and boast the likes of Uber, Airbnb and Eventbrite as clients.
With headquarters in Melbourne, the on-demand employee platform completes more than 1500 jobs a month and has set up operations in Sydney, Brisbane and New Zealand.
Seek itself has enjoyed strong growth with revenue quadrupling in the past year, and the investment will it see it further expand its reach by tapping into a new stream of on-demand job opportunities the company wouldn’t ordinarily advertise.
Amos says the team recently encountered a clear choice between venture capital or a strategic investor.
Seek executives Simon Lusted and Michael Ilcyznski approached the co-founders with the idea of being a strategic investor, and Amos says he was impressed by the high level of professionalism and respect they gave at every step of the way.
“Seek made it very clear that their strategy is to find talented teams with businesses that are aligned to them and let them run,” he says.
“I was confident [Seek] was going to allow us to go on our journey and support us when we need it.”
Questions to ask before choosing strategic investors
Whatever investor route you choose, what’s critical is that you know and like who you will be dealing with, Amos says.
“You have to really believe in the people that are coming to you with the investment,” he says.
“Do they know as much as you do, do you think they know more? Can they add value? Have they got a lot of integrity?”
“Did they show us as a founding team the respect and not waste time?”
Holding up your end of the deal
While there’s no hard fast rule for how and when to update investors, Amos says it’s important to have an active and ongoing relationship with open and honest communication flowing between both parties.
“The biggest thing that can kill an investor-startup relationship is when [one] party isn’t being honest with the other,” he says.
Amos and his team place a high priority on being transparent and open in their reporting to investors.
In addition to a formal quarterly board meeting, Amos says they have a monthly reporting template that takes a couple of hours to put together and they have regularly performance updates on cloud systems that their investors can login to anytime.
Amos even has weekly breakfasts with Lusted to discuss ideas and what’s happening in the market.
These regular touch points ensure that as a strategic partnership, they continue to grow in alignment and don’t give their investors any nasty surprises at the quarterly meeting.
“When you raise investment, you’ve got to make sure you’re growing the business and you’re achieving the goals that you both set out,” Amos says.
“We make sure we’re delivering a service and growth metrics they can be proud of.”