How a 100% US client conversion rate helped this startup secure $500,000 in seed funding
Wednesday, July 10, 2019/
Private aircraft booking startup Monarc Global has closed a $500,000 seed round, as it strives to meet an unexpected swathe of demand from the US.
Based in Brisbane, Monarc allows private aircraft operators to automate their quoting processes. Customers can find, book and pay for travel through a live booking system, as opposed to through a manual enquiry form, as operators have typically used.
Previously, the startup has raised $75,000, primarily through friends and family funding. The technology was launched in beta in Australia in October last year.
The $500,000 seed round was led by the Brisbane Angels, and Angel Loop, a consortium of Queensland angel investors. The River City Labs Accelerator fund and Muru-D also contributed.
Speaking to StartupSmart, Monarc founder and chief Royce Crown said he embarked on the seed round after a particularly successful trip to the US in September last year.
Crown was due to showcase the technology at an event, but also lined up “a few operator meetings”, he says.
“That turned into 98 meetings over six days and over eight states.”
What’s more, the startup saw a 100% conversion rate on those meetings.
“We actually got 98 operators signed up to use our technology even before we had it.”
Over the next two months, those 98 operators referred an additional 74, and by November 2018, the startup was “sitting on 172 signed LOIs and deposits paid to use our technology in the US,” Crown says.
“It was clear that there was a problem we were solving in a big way for US operators.”
At the same time, in Australia, Monarc had some 22 clients “ready to go”, he adds.
“It really became about making sure we were building our core product out correctly and being transparent about how we were doing that,” Crown says.
The team grew from two people to 13 in the space of two months, with a development team and chief technology operator coming on board. The startup also had to start paying for office space.
“It all really starts to add up,” Crown explains.
“Pretty high” KPIs
Crown is now on an Australia roadshow, with a target to onboard 55 Aussie flight operators, or about 65% of the market.
By the end of August, the founder plans to have a team on the ground in the US, and by mid-September, he will be starting to onboard the 172 new customers there.
That process should be finished by the end of November, he says.
“We have pretty high KPIs set up, based on the fact that they’re already registered clients with deposits,” he says.
Understandably, Crown is also anticipating a “huge uptick” in revenue.
The first version of the technology launched in October last year, and between October and December, the startup saw revenues of $4.3 million, he says.
This year, it has a target of $15 million in revenue, “and we’re on track for that”, Crown adds.
By 2020, he forecasts total revenues of between $35 and $45 million.
And, once the Aussie and US businesses are ticking over, the founder plans to take Monarc to the UK and Europe, and also South America, a market he says will be particularly important.
“In Brazil, helicopters are essentially taxis,” he says.
The startup is also gearing up to a Series A round. Already, Crown has had interest from a US VC firm, although he’s not yet able to disclose which one.
“They’ve asked us for numbers for a hyper expansion,” he says.
Essentially, this is the amount of money that would allow Monarc to achieve its projected goals for 2023 in a mere 18 months.
If this interest leads to a Series A round, the startup would be seeking between $7.5 million and $10 million, Crown says.
“It’s a process that’s scary for a founder, because it moves quite quickly,” he says.
“But, at the end of the day, it’s staying competitive in a marketplace where eventually you’re going to have competitors … You’re going to want to stay ahead of the curve.”
Do what you’re meant to do
For other founders in the early-growth stages of their startup, Crown advises focusing on the ups, not the downs.
“You’re going to have some amazing wins, you’re going to have some amazing losses,” he says.
“Focus your energy on the success.”
Some early-stage founders can focus too much on money, and on securing funding, he explains, leading many to look for VC funding too soon.
“Don’t force yourself into a raise until you’re ready to raise,” Crown advises.
“Otherwise you’re just going to sit in an office with a bunch of investors, and you will do your brand damage, because you’re not ready for that yet,” he adds.
“They can always tell when you’re not ready.”
While it can be tough for a founder who can “see the future before the investor can”, those investors will likely want to see traction in the business before they jump on board.
“Have the company do what the company is meant to do … the by-product of running a successful business is the money.”
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