Australian startup success story Culture Amp has closed a large Series B round as it sets its sights on furthering its rapid growth with an expansion into Europe.
The Melbourne-based people analytics platform has secured more than $13 million in funding from the same three VC firms that led its previous $8 million Series A round early last year: Index Ventures, Felicis Ventures and Australian firm Blackbird Ventures.
While it doesn’t get an easier to close the funding, Culture Amp founder Didier Elzinga says having the existing contacts made the process a lot smoother.
“It’s an easier job now getting in to see people and getting the opportunity to be in the same room,” Elzinga tells StartupSmart.
“It’s not easier to get the funding but it’s easier to meet the people.”
Accelerating its rapid growth
He says the capital injection will be used to grow Culture Amp’s platform that offers data-driven insights on employee engagement and culture for companies, expand its team and establish a physical presence in Europe.
“We still have money left over from the A round – it wasn’t that we necessarily needed the money,” Elzinga says.
“We want to help 10,000 companies connect the dots on people and culture. We’re now up to 1000 customers and we want to be able to grow,” Elzinga says.
“We didn’t set out to solve the problem for just the Fortune 500, we want to solve it for everyone. So we’re continuing to improve the product and make it more successful.”
Culture Amp has grown from a team of 14 to 64 people in just the last year and Elzinga says he expects this number to double or triple again this year on the back of the new funding.
“It’s great not just because we have the opportunity to succeed as a business but because we’re tapping into something that is happening more broadly – creating companies where people actually want to work,” he says.
“We were doubling in size even before we took the money.”
The Australian company enjoyed rapid growth in 2015, bringing on board clients including Slack, Airbnb, Easy and five AFL clubs.
This looks set to continue in 2016, with Culture Amp opening an office in London later this month.
This is a natural progression for the startup, Elzinga says.
“We’ve had European clients for a while and we’ve been seeing a lot of opportunities there, so this is a natural evolution,” he says.
“It will give us 24 hour coverage and the opportunity to build a company with people i all the major markets we’re in, and to draw on the talent from there.”
For a company specialising in culture, he says it’s always difficult to maintain this when you’re growing so quickly.
“At the end of the day it comes down to the people,” Elzinga says.
“We are continuing to build a culture-first company and we’re using that to attract people that want to change the world in the way we want to.
“If you want to grow a company you have to grow your people.”
Maintaining an Australian connection
Australian VC firm Blackbird Ventures participated in the Series B round and Elzinga says it’s important for Culture Amp to maintain this Australian connection while it is expanding globally.
“They’re a great firm and they all have relevant and useful experience,” he says.
“We like having them on the journey and it’s also important to be a part of the Australian ecosystem. It would be easy for us to get up and move to another part of the world but it’s good to have the opportunity to work with someone locally.”
In terms of the local Australian ecosystem, he says recent movements are promising but it’s too early to say if it’ll be successful.
“It’s definitely coming along but it’s too early to call it one way or another,” Elzinga says.
“There have been great companies that have succeed in spite of it rather than because of it. A lot of it comes down to as you scale and grow making sure where you are can be a competitive place.”
But there’s one big area that Australia still has to get right in order to be internationally competitive, Elzinga says.
“One thing we don’t talk about much is that internet speed actually matters,” he says.
“With all these conversations about the NBN people forget that one of the things that makes it possible to run a company from Australia is fast internet – if you don’t have that it is impossible.
“We need to have the infrastructure and environment where people can afford to take risks and that those risks can turn into successes.”
For the Australian ecosystem to succeed and produce more startups like Culture Amp, he says it’s crucial to find an equilibrium.
“It’s a really tricky balance – we don’t want to create an environment that is subsidising risks but you don’t want to penalise people that take risks,” Elzinga says.
“They need to be willing to back themselves and then they can go on and succeed.”