Having left Atlassian to pursue their own workplace research-management software, the founders of Dovetail have now banked $4 million, including from Culture Amp co-founder Didier Elzinga, to take their startup global.
The round was led by Blackbird Ventures, and also includes US boutique venture capital firm Felicis Ventures.
Founded by Benjamin Humphrey and Bradley Ayers, Dovetail is a cloud platform allowing for storage of research, design, analysis and insight.
In the past, project managers and researchers have conducted customer research, but used anything from Google Docs to literal sticky notes to store and analyse it, Humphrey tells SmartCompany.
Dovetail is intended to “help them make sense of unstructured data”, and help companies capture findings over time.
Teams can create summarised insights and gradually build up a knowledge base or “a shared brain, if you will”, Humphrey says.
“If everyone in the organisation has the same access to customer research data then it’s quite powerful.”
The startup’s customers already include big names such as Cisco, Deliveroo, Mastercard and Shopify. For something that on the face of it looks relatively niche, the scope of application is significant, Humphrey says.
“Every single organisation talks to their customers in some shape or form,” he notes.
“It’s cross-industry and cross-company-size.”
Humphrey started the business as a side-hustle while he was working at Atlassian in 2016. As a designer, he soon realised he could do with an engineer to help him out and enlisted Ayers.
The pair have been self-funded since then, launching their MVP in August 2017.
Humphrey doesn’t go into detail on the numbers, but says the business is profitable and generating revenue.
He does say, however, that it took “a wee while” to start seeing money coming in.
“It took us a few months to get some paying customers,” he explains.
“A lot of the growth happened last year,” he adds.
“The first 12 to 18 months, was just Brad and I sitting in our kitchens.”
Late last year, having bootstrapped for the best part of three years, the co-founders made the decision to raise funding, in a bid to accelerate their revenue growth.
At that stage, being profitable was a significant string to Dovetail’s bow.
In fact, ahead of the seed round, the founders had turned down several interested investors.
“We weren’t really ready and didn’t know what kind of a company we wanted to build,” Humphrey says.
But, the founders noticed the market for this kind of product was heating up, and realised they had an opportunity to get ahead of the curve.
“We thought we should probably bring on some capital.”
And, while most founders are looking for funding, not turning it down, Humphrey says he actually got used to it after a while.
“It’s a real capital-heavy market at the moment,” he says.
“We had interest from dozens of investors from Australia and the US — especially the US … Americans are getting excited about the Australian market.”
The founders could afford to be picky, keeping a database of investors. When they were ready to raise, they started having conversations with those investors, and eventually landed on Blackbird.
“Blackbird is a premier VC firm in Australia — obviously the success of their portfolio is pretty good, they have a strong network.”
It was Blackbird partner Nick Crocker who introduced the first-time founders to Culture Amp’s Didier Elzinga, who has already been acting as something of a mentor.
“It’s super appealing that he’s gone through the whole thing himself,” Humphrey notes.
“We’ve been able to jump on a video call and talk through the whole process and any challenges we’ve been having.”
Finally, Felicis Ventures brings institutional capital from the US, creating what Humphrey says is an ideal mix of backers.
The funding will be used mostly for building up the team and accelerating its growth.
The startup currently has six developers on board, which Humphrey hopes to triple by the end of the year. Within the same timeframe, he’s planning on opening an office in the US.
At the same time, the startup hasn’t made much of an investment into sales or marketing to date, so some of the funding is earmarked for growing that side of the business.
Startups breed startups
While both co-founders come from Atlassian, they also have Canva alumni on the team. Now, they also have Elzinga as an investor.
The founders are “super fortunate” to have had experience at a success story like Atlassian, Humphrey says.
“That allowed us to start a startup and self-fund for a couple of years,” he explains.
But, at the same time, having large companies like these in Sydney has done wonders for the talent pool and the tech space as a whole, he says.
“The ecosystem has been growing for a bit now,” he says.
When asked whether he sees Dovetail following in Atlassian’s footsteps to become the next Aussie unicorn, Humphrey is modest.
“It would be nice,” he says.
“We’ll see how things go.”
For now, the founders are focused on hiring, growing revenue, and achieving their goals for 2020, he explains.
“We would like to be a few-hundred-million-dollar business at some point … but we don’t really spend a lot of time thinking about that.
“It’s more thinking about what we’re doing next month.”