Startup founders need to look for investments from large corporates instead of trying to disrupt them, Booodl co-founder George Freney says.
The local shopping app has just closed a $2.85 million strategic investment led by Scentre Group, the owner and operator of Westfield in Australia and New Zealand, opening up a whole new world of customer and retail opportunities for the startup.
More entrepreneurs need to be willing to work with bigger, more established businesses to achieve deals like this, Freney tells StartupSmart.
“This shows how big business and entrepreneurs can work together,” he says.
“If a big business can provide distribution and exposure to help grow your business then it can make good sense as an investor and partner.”
To do this, startups need to gain market traction and then pinpoint the appropriate businesses to partner with, he says.
“Make sure you’ve got a great product and a market that’s responding to it,” Freney says.
“Then identify the corporations that are playing in the marketplace that you are, and speak with them – a lot more people will say yes than you think.”
Validation for the pivot
Booodl recently pivoted from a social media-based app to a service helping users find nearby physical stores that are selling products on their wish list. With $5 million in funding from the likes of James Packer and Square Peg Capital invested in the first venture, the Scentre Group investment is the first capital to go directly towards the new direction.
“It’s very good to have this validation,” Freney says.
Heading into Christmas
The startup now has 15,000 users signed up to its platform with more than 1 million products listed, and the cash injection will be used to accelerate this growth.
“We’ll be using the funds to continue to grow in Australia and push hard to get a good market penetration in most major Australian cities,” Freney says.
While many other startups are winding down in the lead-up to the holiday period, Booodl is doing the opposite.
“There are fantastic opportunities leading into Christmas,” Freney says. “Retailers can get onto the platform and start getting their products more exposure for shoppers.
“We’re winding up.”