Melbourne-based real-estate technology startup ActivePipe has raised $1.8 million in a pre-series A round to fund its global expansion, and co-founder and chief executive Ashley Farrugia says having a tight-knit team, a culture-focused company and real-world validation is crucial for startups looking to raise.
Founded in early 2015, ActivePipe offers subscription-based software that uses predictive algorithms to alert real estate agents to which of their contacts is looking at buying or selling property, cutting out the need for cold calling.
The service can also automate communications sent from real estate agents to their customers using machine learning and artificial intelligence: a service Farrugia says will be “fully automated” in the next 12 months.
For Farrugia, the idea for an automated real-estate platform came from learning about the lack of communications between real estate agents and their customers pre and post-transaction.
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While he says “the complexity of the space makes it quite difficult” for startups to disrupt the real estate industry, ActivePipe is seeking to change this with value-add offerings that “makes the customer experience better, and improves an agent’s efficiency”.
It seems the real estate world has been eager to adopt the technology, with the startup boasting revenue growth of 100% in the last year and more than 9000 paying users.
ActivePipe’s offerings are also being “heavily adopted” by the “top two real estate brands in Australia”, according to Farrugia. News of the startup’s latest funding comes as LJ Hooker, one of Australia’s leading real estate service provides, announced it would deploy ActivePipe across all of its offices.
This funding round was led by Asia Principal Capital and will see Martin Dalgleish joining the company’s board as chairman, a role that will involve assisting the company as it establishes a global foothold.
ActivePipe expanded into the UK three months ago, and will be using these funds to consilidate its presence there, according to Farrugia, while also expanding into the US by the end of 2017.
“We built something we believe is globally unique but which has a massive global opportunity,” Farrugia tells StartupSmart.
Farrugia says while the 30-strong company is looking to see “global growth” in the future, he believes “the US is the utopia” for startups because the market and investment opportunities are so large-scale.
“The US [customers] are also much more savvy when it comes to SaaS [Software-as-a-Service] products,” Farrugia observes, adding that for SaaS startups in the US, “the transition to be able to move your product into the marketplace and sell online is much easier, because customers are much more accustomed [to SaaS offerings]”.
“Believe in your team”
For Farrugia, the key to securing the $1.8 million in funding was building a culture-focused startup with a tight-knit team.
“Believe in your team. To me, teams are everything,” he says.
“If you build the right culture and the right team you can disrupt any sector.”
Farrugia says having a culture-first startup is crucial to not only building a great product, but also in proving to investors that the startup is worth funding.
“Until you get that sweet spot when it comes to culture you’re not going to build a good enough product,” he says.
“Investors also look for a good team and a founder that’s a hustler, who’s going to work hard and not let anything bring them down.”
Farrugia says understanding your staff’s career objectives and helping them reach these goals will “help you reach your startup’s goals, and you’ll build a great product.”
“If you treat your staff the way you want your customers treated as a starting point, you can build a really good business,” Farrugia advises.
“Ideas are not businesses”
Startups shouldn’t get weighed down in perfecting their product or idea, and instead focus on getting paying customers and validating their concept in the real world, says Farrugia.
“A lot of people focus on the product, but proof of concept, having paying customers, and organic growth should be a starting point before even talking to an investor,” he says.
“Ideas are not businesses; the reality is investors aren’t going to look at putting money into products that look good and do good things.
“They want to see proof of concept, they want to see that are people willing to pay for it. Do you have organic growth? Is it scaleable on a global level?”
“If you can tick those boxes you’re onto something great”