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Brisbane startup Clipchamp secures $1 million from Steve Baxter — and there are 6.5 million reasons why

Stephanie Palmer-Derrien /

Clipchamp

Clipchamp co-founder and chief executive Alex Dreiling. Source: Supplied.

Video editing startup Clipchamp has secured a $1 million investment from prominent entrepreneur and Shark Tank investor Steve Baxter, but rather than a hard sell in a 30-minute pitch, the investment was the result of a nurtured relationship, and 6.5 million users.

Baxter has also joined the board of the Brisbane-based startup.

The funding will be used to accelerate growth of Clipchamp’s video-editing tool Create, which allows users to upload media files and add transitions and effects easily. It also provides access to a stock footage library, and music and audio files.

Create’s revenue has grown 20% month-on-month over the past year, co-founder and chief executive Alex Dreiling tells StartupSmart.

The plan is to continue that rate of growth, he says, “which means we have to double down on our investments into go-to-market and marketing”.

Although Clipchamp was founded in 2013, at that time, “it wasn’t called Clipchamp, and we didn’t do what we do today”, Dreiling says.

Along with co-founders Soeren Balko, David Hewitt and Tobi Raub, he originally set out trying to build a huge, distributed supercomputer.

The team developed a video compression and conversion tool as a small part of this project, Dreiling says, and when the supercomputer project didn’t work out, they launched the tech on its own.

“We put a webcam recorder onto the site,” he says.

What made the initial tool so popular was that users didn’t have to download or install anything, “you could just record a video in the browser” and it worked on any operating system.

Specifically, “our implementation worked on Chromebooks”, he says.

“That’s what got us popular in the US.”

Snagging 6.5 million

Now, ClipChamp has about 6.5 million registered users across the world, including people working at the likes of Google, Tesla, Sony and Microsoft.

It’s used by corporates, SMEs, influencers and creatives — but the technology really found its footing in the education sector, Dreiling says.

“The whole education sector … has been shifting towards Chromebooks,” he explains.

Initially, the product was discovered by teachers, who used it as a classroom tool, and user numbers picked through word-of-mouth in the education community.

Next, the founders realised highly respected education institutions were posting links to the platform, meaning the site climbed in the Google ranking. This meant the number of users funding the product through Google started to go up.

“People search for a solution to a certain problem, we understood that we had solved a number of those problems,” Dreiling says.

“And the minute we understood that we actually started writing content about it,” he adds.

This content continued to drive traffic and user growth.

In the beginning, this was all done in-house, with one of the founders writing all the content.

Although later they started hiring content writers and investing more in SEO and marketing, the initial influx of users was acquired with no significant spend.

Catching a shark

And it was this growth in user numbers that attracted celebrity investor Steve Baxter.

In the very early days, before the investor found fame on Shark Tank, the team had actually pitched him the original idea.

“He called it malware, and said it wasn’t going to work,” Dreiling recalls.

Ultimately, of course, he was right. And it was some of the points he made at the time that convinced the team to pivot their approach.

Later, the startup moved into Brisbane’s The Precinct startup hub, where River City Labs was also based, headed up by Baxter at the time.

Importantly, Clipchamp was in an office with glass walls.

“Steve walked past our office every single day and he saw a big display with the user numbers in the top corner,” Dreiling says.

The numbers kept on growing, and so did Baxter’s interest.

“At some stage, he realised this thing is really only growing.”

Far from an intense Shark Tank encounter, this was a gradual development of a relationship. And Dreiling says the notoriously grumpy shark was actually very easy to work with.

“There’s a public perception of him … but so far, he’s amazing as an investor,” he says.

“He might come across as grumpy, but I think once he’s invested and is on board, he has one goal, and that is to work together with the company to just grow the whole thing.”

Get the execution right

When it comes to scoring investment — from a high-profile investor or otherwise — it all comes down to the founding team.

“It’s not the idea, it’s how something is executed — and it gets executed by people.”

Rather than focusing on trying to get an investor on board, founders should focus on execution, and on the way they react when things don’t necessarily go to plan.

What attracted Baxter was partly the capabilities of the technology to figure out when something isn’t working, and the founders’ willingness to change their approach accordingly.

“That’s really what investors want to see,” Dreiling says.

“It’s not necessarily the advice that people want to hear, but focus more on the execution and the company … and the high-profile investors will come.”

NOW READ: Why this founder says he’d rather be “thrashed by 130-kilogram blokes” than pitch on Shark Tank again

NOW READ: “I’m not here to back lemonade stands”: Steve Baxter on the best age to become an entrepreneur

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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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