In a big week of funding for Aussie startups, local employee feedback software company Culture Amp has raised $US40 million ($54.3 million) in Series D funding, led by local VC fund Blackbird Ventures.
This brings Culture Amp’s total funding to nearly $100 million since Didier Elzinga, Jon Williams, Doug English and Rod Hamilton founded the business in 2009. The company provides a software platform and tech solution for medium to large companies looking to field employee feedback and build a robust company culture.
Other investors on the round included Felicis Venture, Index Ventures, and Sapphire Ventures. Both founders of Aussie success story Atlassian also got on board, with Scott Farquhar and wife Kim Jackson investing via Skip Capital, and Mike Cannon-Brookes investing through Grok Ventures.
Superannuation fund Hostplus also joined the round, with chief information officer Sam Sicilia saying the fund was seeking to expand its VC investment portfolio.
Speaking to SmartCompany, Elzinga, the chief executive of Culture Amp, says while the new round of funding is a significant mark of validation for the business (and laughing that it’s also “more pressure”), his validation as a founder comes more from walking around the Culture Amp offices and seeing the 230 workers the company employs.
“When I see all the amazing people working on the problem we’re trying to solve, you just pinch yourself,” he says.
Culture Amp has been doubling in size each year, in both revenue and staff. And while Elzinga says it’s great to get that much talent on board, it does bring up some issues around Culture Amp’s own culture, as half of his staff have only been there for less than 12 months.
“That means there’s a lot of culture unformed,” he says.
To solve this, he says it’s a matter of “comms comms comms”; it’s impossible to over communicate with new hires, he says. Culture Amp, naturally, holds itself at a pretty high bar when it comes to its own internal culture, and Elzinga says the focus has to be on successfully fostering that more than ever before as the company continues its rapid growth.
Culture Amp’s software is currently being used by 1,500 organisations, including some of the world’s largest and most prominent companies, including Lyft, Slack, Disney, Nike and McDonald’s. These big-name players are great to have on board, says Elzinga, but Culture Amp’s next phase of growth is aimed at broadening out the industries its software is used in.
“Our mission is about accessibility, getting our software into the hands of real companies solving real problems. We think we can help the journey of companies in industries like health, retail, and government,” he says.
Tracking culture akin to website analytics
Speaking to SmartCompany, Blackbird Ventures partner Nick Crocker says the VC firm was really excited to get the opportunity to lead the latest round of investment in Culture Amp, having first invested in the company back in 2015.
“We couldn’t be more thrilled to back that team as they supercharge for their next phase,” Crocker says.
Blackbird is backing Culture Amp because culture is one of the fund’s “obsessions”, says Crocker. The VC fund is putting serious focus on companies with strong cultures, and that makes Culture Amp’s similarly aligned focus an easy match.
“We love companies focused on enabling really strong culture, and Culture Amp has led the way globally on that. None of the best companies in the world think of culture as a ‘box tick’ anymore,” he says.
“We think they’re just scratching the surface. Look at any of Culture Amp’s customers, that culture focus has spread everywhere from massive organisations to companies with just 40 people.”
Crocker believes Culture Amp’s efforts to revolutionise people management means the day will come when employee data will be as ubiquitous as sales data or website traffic.
“Not looking at your culture data is going to be a bit like if you were managing a 40-person-plus organisation and you never looked at your Google analytics or website traffic. Now that this culture data is so freely available, how could you run a company without wanting to have a quantitative understanding of how your culture is evolving?” he says.
With four funding rounds under his belt, Elzinga says he still doesn’t enjoy the experience, likening it to the philosophical conundrum of Schrodinger’s Cat.
“Every time I do fundraising I think ‘I’m never going to do this again’,” he says.
“It’s like Schrodinger’s Cat — you never know if you’re dead or alive until it all resolves.”
One of the things the founder says he’s most proud of with Culture Amp’s Series D round is the investors behind it, with the round attracting traditional VC firm Blackbird Ventures, entrepreneurs’ personal investment firms such as Grok and Skip Capital, and traditional investors through super fund Hostplus.
“That’s three different levels of VC funding, and they’re not putting in $100,000, they’re putting in millions. It shows our industry is really maturing,” he says.
“I was also really proud of the fact we were able to have the lion’s share of investing from Australian investors. It’s good for the industry.”