Portfolio management startup Jacobi has landed an $11 million funding round from Silicon Valley investors and is mulling an ASX listing, hoping to match the success of listed SaaS titans such as Slack and Zoom.
Founded in 2014 by Tony Mackenzie, Tanya Bartolini and Greg Knox, Jacobi is a B2B platform that helps institutional investors with asset risk management, modelling and analytics.
Mackenzie, a former executive at the Queensland Investment Corporation, realised the need for a platform like Jacobi after realising the software being used by institutional investors was far from fit-for-purpose.
“The software investors were using was easily 20 years old, and with more funds being objective-based and future-focused, I saw the current software just wasn’t adequate,” he says.
Mackenzie teamed up with Knox and Bartolini, and started building Jacobi in Brisbane. However, just a year after founding, Bartolini and Mackenzie jetted off to the US, permanently basing themselves there to help the startup seek funding and roll out globally.
“Not only are there more VCs and angel investors in the US, but there’s also a huge number of institutional investors, family offices and managed funds, far more than there are in Australia,” he says.
“The last four years we’ve been living in California, meeting investors and building our credibility.”
The hard work has paid off, with Valley-based funds Illuminate Venture Partners, 8VC and Credit Ease Venture Fund leading the $11 million round.
Different investment environment in US
When getting investment from US funds, Mackenzie believes there’s a common misconception among Aussie founders they can “just go visit some VCs and get a cheque”.
“It’s not as simple as that. You have to spend time there and become part of the ecosystem and environment. VCs are taking a big leap of faith in backing you, so they want to get to know you and see that you’re delivering on all the things you claim you are,” he says.
The founder also echoes other Aussies who’ve spent time in the Valley, pointing to the significant cultural differences when it comes to doing business. US investors are more direct, says Mackenzie, when compared to the “laid back” business scene Down Under.
But unlike other founders, Mackenzie doesn’t advise founders try to re-invent themselves and drastically change their personas, believing instead founders should just focus on building a great product and taking it to market.
“Almost no VCs today are signing cheques for just an idea,” he says.
The majority of Jacobi’s team, along with co-founder Knox, are still based in Brisbane, where tech talent is more plentiful, and the cost of living is far lower. And while the two cities may not share many similarities in business culture, Mackenzie says the broader lifestyle is much the same.
“Californian lifestyle is much more laid back compared to the east coast. I think for a lot of Australians, California is an easier assimilation, as people love the outdoors and have a similar outgoing nature,” he says.
“But on the tech side, there are not many companies in Queensland, but that’s something we’re hoping to change.”
This drive for change is despite the perceived tech talent shortage in Australia, something Mackenzie says was a point of concern for some US investors. However, Mackenzie says Jacobi hasn’t had any problems, attributing their hiring success to Queensland’s strong universities and an effective internship program.
ASX listing on the cards
With $11 million in their pocket, the founders say they’re setting sights abroad, looking to lock down some “marquee clients” in the UK. A potential ASX listing is also on the cards, with Mackenzie believing the local exchange is a strong option for tech companies.
“You can do it here at a much earlier stage than you could in the US, as basically, unless you’re a $5 billion-plus company, you don’t want to list on the NYSE,” he says.
“We’re also seeing globally there’s a huge demand for SaaS businesses as investors are attracted to the recurring revenue base, we’ve seen that through listing like Zoom and Slack.”
While startups can often be deterred from going public thanks to the onerous disclosure requirements, Mackenzie actually welcomes them, saying they can help businesses “enforce good governance”.
“While you don’t want to do it too early, there’s nothing like the discipline of being listed to help a company grow up.”