Queensland startup Kapiche has raised $1.75 million for its data analysis platform, as it gears up for US expansion and eyes a $2 billion valuation by 2030.
The funding round was led by Main Sequence Ventures, and also included Transition Level Investments, the River City Labs Accelerator Fund and the Queensland government’s Business Development Fund.
Founded in 2017 by engineers and high school buddies Ryan Stuart and Kris Rogers, Kapiche is an AI-powered platform designed to help companies glean better insights from their customer feedback data.
Typically, companies make decisions off the back of structured data — things like the length of time they stay, how much they spend, and how likely they are to recommend a product.
“That’s all structured data,” Stuart tells StartupSmart.
“But over 70% of the world’s data isn’t that type of data.”
The more valuable insights are in customer opinions, whether from direct customers surveys and reviews or from social media platforms.
“For businesses to be making decisions, they really need to be able to find a way to understand those opinions.”
The majority of businesses have this data already, Stuart explains. Kapiche isn’t involved in the collection process.
What the platform does is allow companies to take both the structured and ‘opinion’ data into account.
“When you start overlaying the structured data on top of the understanding of their opinions, that’s where the actionable insights come from,” he says.
Having attended both high school and university together, Stuart and Rogers later found work together as engineers, and noticed a gap in the market in this space.
The pair started tinkering, trying to come up with algorithms in the garage.
They built “a few small-ish MVPs that didn’t really hit the mark”, Stuart says.
“We built them without talking to anyone, basically.”
In mid-2016, however, Kapiche was accepted into the CUA Sponsored Entrepreneur Program, based at River City Labs.
Taking stock of some of their early work, they figured out how to offer customers value with the product they had, and launched Kapiche in April 2017.
“We got our first paying customer pretty quickly,” Stuart says.
The following October, the founders were accepted into the Muru-D River City Labs accelerator in Brisbane.
Stuart doesn’t reveal any revenue figures, but says the startup went “from zero to something much bigger than zero fairly quickly”.
The trajectory now is to start actively trying to sell the product in the US next year. If all goes well, the founders will look to raise another capital round mid to late next year, and open an office in the United States at about the same time.
“We want to be a $2 billion company by 2030,” Stuart says.
“That’s our goal.”
It’s one thing for founders to say they want to be “a massive company”, Stuart says. For him, it’s important to be able to define that with a solid valuation goal.
“We want to have a world-leading brand,” he adds.
Already, the founders have started using the latest funding to more than double the Kapiche team from five people to 11.
The startup has also moved out of the co-working space and into its own office.
However, the funding is mainly pegged for refining the product-market fit, and building “the best possible go-to-market team”, Stuart says.
“A good product is absolutely essential to being able to compete in this market,” he explains.
“But, even a great product without a world-class go-to-market team is pointless.”
Founders, and particularly technically minded founders, can get caught up in building their product or platform. This is especially true for B2B SaaS companies, Stuart warns.
“Having a great product isn’t the end of the road,” he says.
“You will die without having a great go-to-market team.”
In fact, he says there are examples of incumbents that have pretty average products, but that are doing well because their go-to-market team is exceptional, he adds.
“Don’t fall into the trap, as a B2B SaaS organisation, of thinking that you’re going to build the greatest product and people are just going to rock up. Because they won’t,” Stuart advises.
“If you don’t think about go-to-market from day one … then you will fail.”