Melbourne-based social media intelligence startup PoweredLocal has closed a $500,000 capital raise, adding high-profile investors to its list of backers as it plans to accelerate expansion.
The new investors include prolific angel investor Adrian Stone of AngelCube, Salta Group’s David Tarasio, who is the son of the BRW Rich Lister Sam Tarascio Snr., and Netspace founder Stuart Marburg, who was listed on the BRW Young Rich List in 2013 after selling Netspace to iiNet for $40 million. The raise is being led by Australian venture capital seed-fund Rimon Investments.
PoweredLocal’s latest cash injection comes less than 12 months after it secured a $125,000 investment, which valued the Melbourne startup at more than $4.5 million less than a year after its launch.
Work those networks
PoweredLocal co-founder Michael Jankie says the latest high-profile backing comes after many years of maintaining advisory relationships with investors, and suggests startups looking to raise should do the same.
“People like Stu Marberg and Adrian [Stone] — we’d been bouncing ideas off them for three years,” Jankie told StartupSmart.
“We had started these conversations not looking to raise but looking to grow.”
Patience is also key when raising funds; Jankie says the startup has been speaking to its investors “for over 18 months — not about investing, but about getting feedback”, before the latest raise.
“Advice is far more valuable than money”
Jankie suggests startup founders should not “even think about raising money” but should instead focus on “getting to a point of sustainability.”
Founders should consider how their business can”go into survival mode” in order to have “deep and meaningful talks” with investors instead of spending 9-5 every day pitching for investment, Jankie says.
This allows founders to strategically target the most insightful, rather than the most well-funded, investors.
“It’s not about targeting people with wealth but targeting people with knowledge,” Jankie says.
“Capital raising round was … about getting more advisors on board and more people who could open up their networks for us,” he says.
“Advice is far more valuable than money.”
What’s next for PoweredLocal
PoweredLocal enables businesses to provide free Wi-Fi services with a social media check-in and data analysis. The business valued at between $5-6 million post the most recent raise, and boasts just under $1 million in annual revenue.
It plans to use this funding to accelerate business growth and “go even harder”, Jankie says.
This includes building on PoweredLocal’s current 1,200 locations across Australia to add more customers to its growing user base that already includes Sushi Sushi, Aria Restaurant, Snap Fitness and The Dental Co.
“We’re betting the house on this: we’re going to win or we’re going to go bust,” Jankie says.