Adelaide startup Lumary has secured $2 million in funding, as it looks to expand the scope of its technology for the aged-care and disability sector.
The funding comes from venture capital fund Equity Venture Partners, and director Daniel Szekely will also join the board of the startup.
Founded by Joseph Mercorella and Matthew English, Lumary is a workflow management solution for workers in the disability and aged-care sector.
Both co-founders were previously contractors with the South Australian government when the National Disability Insurance Scheme came into effect in 2013, Mercorella tells StartupSmart.
“The marketplace was very green,” he says.
“There wasn’t a lot of support for this evolution in the scheme, and what it meant from a technology perspective.”
The founders saw an opportunity, and started reaching out to organisations and charities that were affected by the changes.
“We got a great understanding of where the market gap was around technology acumen and what was needed to transition effectively to be feasible in the new world,” Mercorella says.
However, he knew nothing would change quickly. While the founders came up with the concept and started building technology, it wasn’t until two years ago that Lumary was launched.
Now, Lumary has partnered with Salesforce to provide customers with more customisation options in their technology.
It also now has about 45 staff members, across its offices in Adelaide, Sydney and Brisbane.
Easing the transition
For Mercorella, it was important the solution was configurable to each individual user, while also offering them the services they would expect as standard.
The software now has an 80-20 model, he says, where 80% of the functionality is ‘out of the box’ and 20% can be tweaked and configured to suit the clients’ needs.
“We’re solving what they need to have solved, and we’re not making it a big deal for them … and we’re enabling them to be competitive in a marketplace which is consumer-centric and demand-driven,” he explains.
The aged-care and disability sector has largely been underserved when it comes to technology solutions, Mercorella says.
Historically, there has been a lack of funding in the space, and no pressing need to introduce specialist software.
Most organisations are not-for-profit, and previously, according to Mercorella, have had operating expenses costs of 30% to 50%.
“The NDIS came in a shook everything up,” he says.
Now, many organisations have to run with operating expenses costs of 15% or less.
“The only way you’re going to do that is if you’ve got technology.”
While Mercorella and English saw an opportunity here, they also realised the transition was going to be a difficult one for many of the organisations affected.
“Our role is to make that as easy as possible, and give them as much support as we can,” Mercorella says.
“We’re not set up to provide services directly to the community. But we can empower the organisations that are working with us, and our customers from a tech perspective, to become efficient and effective in the way they provide their services to the community,” he adds.
“We want to bring better wellbeing to the community, and we’re doing that through our technology.”
For Lumary, the past couple of years have been about listening to the market, and learning from it, and securing gradual growth, Mercorella says.
Now, it has a solid client base of more than 90 customers, and it was the right time to raise external funding.
“We’ve proven what we need to prove,” Mercorella says.
“What we need to do now is scale some of the development.”
The funding will be used to invest in technology, adding additional components to improve the customer experience.
The founders will also invest in a sales and marketing infrastructure — something they haven’t had in the business so far.
“We wanted to become a more mature startup, and recognise that we’ve done what we needed to do to prove out the model,” Mercorella explains.
The next phase of the business will be focused on establishing the business in Australia and becoming “the key player within this space”, he adds.
Then, they will take the model overseas.
NDIS was Australia’s way of trying to get care providers, consumers and partners on the same page and being more effective with their funding, Mercorella says. But this is a problem that exists everywhere.
“Every country is basically saying the same thing, they’re just saying it in different ways.”
Research, research, research
For any startup, Mercorella stresses the importance of researching your market, and understanding the customers’ needs, how they will access a solution, and the barriers they might be facing.
“Understand your problem well before you start to solve it,” he advises.
Then, if and when a founder decided to take external funding, they should make sure they’re partnering up with an investor that’s aligned with their vision.
Any venture capital or private equity investors will ultimately be looking to make money from the venture, he says.
“Ultimately, they have to share in your vision and your mission. Don’t take anybody,” Mercorella says.
“If you’re worthy of it, you will have plenty of people that will come knocking on your door to be part of the journey with you.”