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“Pie in the sky”: A Cloud Guru raises $47 million after smashing early growth goals

Stephanie Palmer-Derrien /

A Cloud Guru

A Cloud Guru co-founders Sam and Ryan Kroonenburg. Source: Supplied.

Enterprise training startup A Cloud Guru has secured $US33 million ($46.8 million) in funding to support its next phase of growth, as more and more companies move from on-premise servers to cloud-based computing.

The funding round was led by US growth equity firm Summit Partners, and also included Aussie VC AirTree Ventures and existing investor Elephant.

Founded in 2015 by Aussie brothers Sam and Ryan Kroonenburg, the startup uses interactive and online learning to help IT professionals re-skill in cloud computing.

It was conceived to address the “fundamental shift” from on-premise servers to cloud platforms such as Amazon Web Services, Google Cloud Platform and Microsoft Azure, Sam Kroonenburg says.

“Pretty much every company on earth right now has a mandate to move to cloud-based computing,” he explains.

“A really huge skills gap has emerged.”

Now, according to Kroonenburg, A Cloud Guru has now trained more than 850,000 users in 186 countries.

The original “pie in the sky” goal was to reach 100,000 people, he says.

“We did that within the first year. That was a huge motivator for us.”

Over the past 12 months, the startup has seen more than 80% revenue growth, Kroonenburg says.

And its headcount is growing, too. In 2018, the business grew from 20 people to 75. Now, there are about 110 staff members in the Melbourne, Austin and London offices.

A growth opportunity

A Cloud Guru was self-funded for its first few years, before raising $US7 million from Boston-based Elephant Venture Capital in August 2017.

Now, the market is growing quickly, and so is Guru. This raise is pegged to support the growth ahead, allowing the startup to hire more staff, expand its content library and build out new features.

However, Sam also saw it as an opportunity to bring more strong partners on board.

The lead investor in this round, Summit Partners, was “really aligned with our vision”, Kroonenburg says.

“They’ve made a lot of really smart investments in the cloud ecosystem,” he adds.

“They really deeply understood the space, and the opportunity.”

It was also important to the brothers to bring Australian investment on board in this round. They have known the investors at AirTree Ventures for a long time, Kroonenburg says.

“They 100% got what’s going on here in the market … and where we want to take the business.”

Although most of Guru’s business is overseas, it’s still an Aussie company, committed to helping support the local ecosystem.

“I want to see great product and Software-as-a-Service companies coming out of Australia, and I think it’s important that we’re part of the Australian VC and investment ecosystem,” he says.

“We want to see Australia VCs succeed, and Australian businesses succeed, and ultimately have awesome jobs for the future for Australians.”

Born global

That said, this was a global business from day one — literally.

When the brothers founded A Cloud Guru, Sam was based in Melbourne, while Ryan lived (and still lives) in London.

The company was built online and run online, and services were sold online.

Currently, only 5% of customers are Australian, with more coming from the US, Europe and Asia.

“A couple of years in, we had to start investing in offices and having more of a physical presence,” Sam Kroonenburg says.

For the first couple of years, and to some extent today, online chat system Slack has been at “the heart and soul of the business”, he adds.

“That’s rolling 24 hours a day — there’s always discussions happening there depending on who’s awake.”

Managing having founders in two distinctly different time zones, and offices on different continents, has meant the founders have built overlap times into their working hours.

“It’s about careful planning and being respectful of the importance of that time-zone overlap.”

For example, staff based in Melbourne are asked not schedule Melbourne-only meeting in the times the Texas team is in the office, freeing up time for people to schedule calls.

But it’s worth the extra logistical effort for the advantages a global footprint brings.

“Being global has helped us in other ways,” Kroonenburg says.

“It brings different perspectives.”

Learn from your mistakes

For other startups looking to raise funding, the very first thing to do is to get the fundamentals in order, Kroonenburg says.

“Before you go off and chase investment dollars, get the fundamentals of the business right,” he advises.

“Make sure you really have a product that people want to buy and that you can do that with a business model that works.”

From there on out, it’s all about the people, he says.

“Get people who are brighter than you around you,” Kroonenburg suggests.

“The best thing we ever did was to bring in really high-calibre leaders and people within the business to really do things better than Ryan and I ever did them.”

Bring savvy people into your business “and you will just see it blossom”, he adds.

Finally, Kroonenburg encourages founders to learn from their mistakes.

“You will do a lot of things wrong,” he warns.

However, in his case, these were a lot of small errors, rather than one big one. The trick is in trying lots of things, and doing the one that works best.

“Try a bunch of things, work out which one works, follow that, and base your next move off the thing that worked,” he says.

You may make hundreds of errors, he adds.

“But as long as you can recognise which things work, and double down on that, that’s the way to succeed.”

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is the editor at StartupSmart. You can contact her at [email protected].

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