After an unsuccessful equity crowdfunding raise last year, home-loan fintech Joust has been acquired by property startup HouseandLand.com.au, in a bid to realise its growth ambitions.
Founded in June 2016 by managing director Mark Bevan and co-founders Richard Hockney and Greg Abel, Joust is a home-loan auction app, allowing consumers to pitch loan providers against each other to provide the best low-interest rate deal.
The startup has raised about $1.8 million in angel investment to date. Last year, the startup embarked on an equity crowdfunding campaign, but “came up short of our minimum target”, Bevan told StartupSmart.
Joust has been looking for investment for the past 12 months, but Bevan was never keen to go down the VC route, he says.
“We’ve always had a preference for a strategic partner,” he says.
“VC funds have not been the ideal fit for us.”
HouseandLand is a platform matching plots of land for sale with designs for homes, from local builders, that fit the dimensions.
Under the agreement, HouseandLand has acquired a 70% stake in the Adelaide fintech, but the value of the acquisition has not been disclosed.
Bevan says merging home-loan and property startups is a good strategic match.
HouseandLand has a strong content strategy, he says, which “has capacity to attract a lot of eyeballs” to the Joust product.
“There’s the possibility of that providing us with a steady stream of free leans and traffic and volume, which has always been our challenge,” he says.
Once customers are in the door, Joust has a good track record of converting interest into business, Bevan says. But the startup has struggled to secure that traffic in the first place.
“Like a lot of startups, our cost of acquisition of customers can be very high,” Bevan says.
“Anything that reduces that is of huge benefit to us,” he adds.
Over the next 12 months, as part of the HouseandLand family, Joust will first focus on integrating the two technologies and “getting that perfected”, before embarking on a marketing strategy to drive new traffic to both startups.
“The model is proven,” he says.
“It will give us the opportunity to demonstrate the validity of the business model and proposition.”
“Once we’ve got that story and can demonstrate that scalability, we anticipate attracting a lot of attention,” he adds.
Bevan also has his sights set on taking Joust abroad.
“The HomeandLand team are very excited about the prospects of scaling rapidly and overseas markets,” Bevan says.
The Joust team has looked into the New Zealand and UK markets, and HomeandLand has existing connections in the US, he says.
“I would expect the US market is potentially likely to be our first target,” he adds.
False starts and mistakes
For startups looking to build connections for growth, Bevan says it’s difficult to give advice, because every business is different.
“The startup journey is full of bumps in the road and challenges and false starts and mistakes,” he says.
“Every startup journey is slightly different, and there will be a bit of bad luck along the way, and in our case in recent times a bit of good luck.”
Joust has been fortunate in that the founders have been able to utilise its shareholders’ connections to generate discussions. That’s how the relationship with HouseandLand came about.
“But not everyone has necessarily got the same network of connections,” Bevan says.
However, to an extent, he advises founders try to build their networks as much as possible.
“That personal network has proven more fruitful than pitching to VCs. We’ve been looking to raise funds for 12 months, and it’s a very difficult task.”
Having a network is “undeniably valuable … but whether it guarantees success is really difficult to say”, he adds.
“I would like to say there’s a correlation between effort and hard work and networking and all those things to result, but I’m not sure I could put my hand on my heart and say that’s definitely the case.”