After seeing a 350% growth in monthly recurring revenue, and shifting its focus squarely onto the US market, online training platform Coassemble has now secured $4.4 million in Series A funding to embark on its next phase of growth.
The Australian startup’s funding round was led by Sydney-based venture capital firm Equity Ventures Partners.
Founded in 2016, Coassemble represents a classic story of a founder solving a problem he was experiencing himself, just to find others wanted his solution too.
Co-founder Jude Novak was working at a company developing e-learning resources for business, he tells SmartCompany.
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“I was shocked by how dull all the material was,” he says.
Novak set out to create more engaging and fun content, but quickly found relying on UX specialists, designers and developers meant the prices racked up quickly.
He created an online platform of templated resources, allowing anyone at the business to essentially plug in the content to create interactive learning experiences.
“It wasn’t long after that that we figured we could probably sell this to other businesses,” he says.
Along with co-founder Ryan Macpherson, Novak released the product to a select few customers in March 2016, and the pair officially launched the startup in the following July.
Now, the Coassembly platform allows teams to present their business knowledge in bite-sized chunks for training purposes, while also allowing learners to track their progress as they go.
“For the first couple of years we were running extremely lean and really building out,” Novak explains.
The latest funding round adds to $2.2 million secured from private investors over the past few years. In 2018, the Coassemble founders used some of that cash to grow their team, a move that effectively led to more than 350% growth in monthly revenues.
“We invested really heavily and saw massive payback,” he says.
“Return on investment was huge.”
Before the seed funding, Coassemble was seeing monthly recurring revenues of about $30,000. Now, that figure is more like $140,000.
And, there’s no reason this latest raise couldn’t have a similar effect, Novak says.
“We intend to do the same thing again.”
This series A funding will largely be used to grow the Coassemble team again, this time to build out the design, marketing, sales and customer support teams.
Many of these new hires will also be based in Coassemble’s new US headquarters in Denver, Colorado.
While the engineering and product design work is still done in Australia, the founders have made the decision to focus on the US as their primary market.
“We don’t actually actively sell in Australia anymore. We’ve turned off all marketing efforts in Australia,” Novak says.
Partly, the decision was down to the size of the market, he explains. The US market has also proven to be more receptive to what Coassemble is offering.
“The US market is more akin to taking up new technology in this space,” the founder says.
A lot of the startup’s Aussie clients are in the education sector, but that’s not the market the founders intended to target.
“We’re targeting small and medium-size businesses that require something to allow them to upskill staff,” Novak says.
“They’re usually companies that are really tech savvy and have remote teams, but require a way to train staff, or just a way of sharing knowledge in general.”
And, at least for the moment, they’re taking it one market at a time.
“Our focus is purely on the US — it’s such a big market, if we don’t focus there, I guess we’ll get distracted.”
The road to Colorado
While Coassemble has gone to the US to make its fortune, it has seemingly bucked the trend by choosing to settle in Denver, Colorado, rather than rooting itself in California.
This wasn’t always necessarily the plan, Novak confesses. The startup actually had a temporary office in Los Angeles for a year.
“Geographically, it makes perfect sense,” Novak says.
“I think that’s why if you were from Australia you would go to LA … it’s the easiest route in and out.”
However, the Newcastle-born business didn’t quite fit in. Indeed, you would struggle to find two more different cities.
“It’s very, very, very competitive — even though there are a lot of people there with the skill sets, they’re jumping from job to job,” he says.
“We couldn’t afford to hire people.”
In Denver, however, “it’s been really easy to find really good quality staff”, Novak says.
And everything, from office space to apartments, is much more affordable. Denver is to LA what Newcastle is to Sydney, he says.
“It’s a lot cheaper — for everything,” he adds.
“And there’s a lot of other startups there at the moment as well, so there’s a good vibe.”
“Sometimes you feel like a fraud”
He may be heading up an ever-growing team, running a startup out of two countries and bringing the dollars on board to fuel further growth, but Novak says he still suffers from a touch of imposter syndrome.
“It doesn’t really sink in,” he says.
“I didn’t go to uni and study how to do this. I catch myself in scenarios I never thought I would be in.
“I have to be a leader; we’re hiring all these new people and they all look up to me … sometimes you feel like a fraud.”
But, for this founder, the best way to keep his confidence up is to hire wisely. The co-founders have always tried to hire people who fill their own skill and knowledge gaps.
“Our best investment is ensuring we’ve got really, really good staff,” Novak says.
“We try to hire people who are better than us at the specific roles we were doing … I used to do it all, but I was mediocre at all of it,” he adds.
At the same time, letting people know they’re valued, and giving them autonomy to own their roles, creates a strong company culture, the founder says.
“By making sure we’re hiring people who don’t need to be looked after, and who have lots of great ideas themselves, everybody appreciates the business.”