Melbourne urban-data startup Neighbourlytics has raised $1.25 million in seed funding, led by Carol Schwartz’s Trawalla Group, as it gears up for growth to meet increasing demand.
The round also included women-focused angel investor network Scale Investors, and venture capital firm Artesian.
Neighbourlytics was launched through BlueChilli’s SheStarts accelerator in 2017.
Co-founders Jessica Christiansen-Franks and Lucinda Hartley were both previously urban designers, and had run a consulting business together for the past five years.
Get business news first
Sign up to SmartCompany’s daily newsletter
The startup provides a social analytics platform designed to measure the “quality and wellbeing in cities and neighbourhoods, based on their digital footprint”, Hartley tells StartupSmart.
That data can then help city-makers, developers and governments gain insight into an area, and plan or build accordingly.
Neighbourlytics takes data from sources such as Google and Google Maps, Facebook, Twitter, Zomato and Yelp, to create new information that “speaks to the lifestyle and experience and the culture and social life of a place”, Hartley explains.
It solves a “gruelling pain point” for both the government and property sector, she adds.
Previously, the only metrics available have been quantitative data about things like the number of apartments sold or traffic volumes.
“It’s almost impossible to create places for people without any data about the people,” the co-founder says.
“We’re now at a point in time where we can measure things like quality of life and wellbeing like we couldn’t before,” she adds.
“That’s always been a really intangible thing, but now we have a way to quantify it, which is a really exciting proposition.”
Neither Hartley or Christiansen-Franks come from a technical background, and they applied for the SheStarts accelerator “somewhat on a whim”, Hartley says.
However, after building their MVP during the program, they saw significant customer traction at a very early stage. They bought a data scientist on board, and began working to improve the product in-house, Hartley says.
The co-founder admits this early success did not come about because of the strength of the product.
“Just there’s such a dearth of data about anything to do with human dynamics and cities,” she says.
Up until now, Neighbourlytics has been bootstrapped. In the past financial year — its first full year of trading — it saw annualised revenue of $500,000.
“We were pretty excited by that number,” Hartley says.
“We think it’s a really fantastic product, but what surprised us was the attitude of what is a pretty risk-averse customer base,” she adds.
“The growth has really far exceeded anything that we expected at this point in time.”
Having the support of Carol Schwartz is a big win for the Neighbourlytics co-founders, Hartley says.
“She’s a heavyweight in the property sector, and for us, that brings a lot of credibility and trust in the product.”
The Trawalla Group as a whole has also been very “positive and supportive” of the startup.
“On a personal level, she [Schwartz] offers a lot of inspiration,” she says.
“She’s a great mentor and inspirational person to be around.”
Scale Investors also brings a diverse group of people, with varying skills and areas of expertise, to the table.
“There are many avenues for us to access the non-monetary support you need when you’re growing a fast-growing business,” Hartley says.
The seed funding will be partly used to further develop the Neighbourlytics product, and to “unlock a lot of bottlenecks in the technical pipeline”.
However, the co-founders are also planning to pivot the business model slightly. Currently, although the startup has access to live data, it’s sold through an acquisition model, with customers purchasing quarterly or six-monthly reports.
“We haven’t yet built the full capability we need to enable our customers to have all of the real-time capability of that data, and to be able to track trends over time,” Hartley explains.
Now, they’re looking at implementing a more traditional Software-as-a-Service model, allowing customers to subscribe and access the data sets and track ongoing trends at any time.
The team is also looking at expanding the reach of their data capture to cover whole cities, offering the functionality to compare how well neighbourhoods are thriving across a whole municipality.
“A year ago, we didn’t know that would be the best product direction for us,” Hartley says.
Now, because the founders have worked with enough customers, they realise people want more real-time capability and more scalability.
“That’s something we can absolutely offer,” she adds.
“We just need to hire a whole bunch of devs to help us accelerate that.”
“You’re the one in the trenches”
While Hartley says she and Christiansen-Franks have learnt a lot on the founder journey so far, one thing Hartley says she is increasingly learning is the founders know more about their business than anyone else.
“There is so much advice in this startup space — more than any other industry I’ve been in,” she says.
“That’s a great asset, but it also can be hugely confusing, because people have a lot of different opinions,” she adds.
“At the end of the day, you’re the one in the trenches day-in-day-out.”
While founders are wise to take outside advice on board, they should remember they are the authority on what’s best for their business. And knowing that will inevitably mean going against someone else’s well-meaning advice.
“I’ve always had the mindset that you’ve got something to learn from everybody, so I appreciate that,” Hartley says.
“But sometimes you get quite strong advice, which comes with good intentions, but if you’re dealing with your customers every day, you have a better sense of what they need than someone on the outside.”