Aussie Software-as-a-Service startup Practifi has raised $US16.3 million ($23.6 million) in Series B funding, as it ramps up its US business. And, co-founder Glenn Elliot says when it comes to cracking the States, Aussie startups have it all to play for.
Founded in 2013 by Elliot and co-founder Adrian Johnstone, Practifi is a platform for wealth management and financial advice businesses, designed to offer an easier way to manage client relationships.
The Series B round was led by US growth equity firm Updata Partners, while existing investors Equity Venture Partners also took part.
It comes almost 18 months after the startup’s $3 million Series A round, closed in August 2018 and pegged for opening an American HQ in Chicago to capitalise on a spike of growth in the US.
Since then, operations Stateside have gone “from strength to strength”, Elliot tells StartupSmart.
“We’ve massively ramped up our growth there now,” he adds, having secured clients all over the country, and in Canada.
At the same time, growth in Australia has been strong.
While he doesn’t reveal specific financial details, the chief notes that Practifi has been in the US market for just shy of two years. In that time, it’s gone from landing its first client to “being very close to our hundredth”, he says.
Since securing the Series A funding, the business has also more than tripled its headcount, growing from 12 people to 50.
A formula for success
This latest chunk of funding will allow Practifi to double down on “a really clear formula” that has been working for the business.
According to Elliot, growth both in the US and Australia has been led by a client success strategy.
Rather than taking an aggressive sales approach in the markets, “we were very aggressive in really trying to delight our clients”.
The business works in an industry that is very connected — where people talk and where reputation matters. Through providing good customer service and support, Practifi has grown through achieving customer success, Elliot says.
And, as he looks to grow the startup even further and faster, the co-founder isn’t necessarily worried about his ability to maintain that strategy.
“I don’t think it gets harder to maintain at all,” he says.
He admits Practifi doesn’t “necessarily thrill all the people all the time”, but says it has clear feedback functionality, allowing clients to identify gaps in the service, or things that aren’t working for them.
And when the team gets feedback, it responds quickly and integrates that into its roadmap, he adds.
“That’s such a dynamic feedback loop that they really appreciate,” he says.
Part of the Series B funding is earmarked for investment in the product team, which will focus on creating new integrations and analytics capabilities, and products making the product more connected to user experience.
“We can make it more seamless … more configurable for your average day-to-day user.”
Aussies, dream big
Having successfully scaled an Aussie-born startup in the US, Elliot says there’s no real secret sauce to getting it done. Rather, for Australian founders, it’s about mindset.
“You see a tonne of talent among founders in Australia … they’re very much sought after by the VC market in the US,” he explains.
“We’ve got quite a reputation for being able to achieve great things with limited early-stage capital — there’s much less availability of early-stage capital in the Australian market compared to the US market.”
In his experience, VC firms from the US will often actively look to Australia for investment opportunities, Elliot says.
“They know there’s a grittiness — there’s an ability to really get shit done here without a lot of capital injection upfront. That’s a great feather in the cap of Australian entrepreneurs.
“But, I think sometimes where they go wrong, is they don’t always think big enough.”
Aussies have great ideas, but they have a tendency to focus on their local market.
“Could this go global? Could this go international? What does it look like to put an international flavour on it?
“All too often, I find that’s not being thought through at an early stage.”
He recalls some advice he got early on in his own journey.
“It’s really not much harder to build a big successful company as it is a small successful company. You’re going to be working your arse off anyway, you may as well think big and build big.”
And Elliot argues there’s really not much standing in their way.
“You have access to all the same technology, all the same talent; plane travel is cheaper and more frequent than ever before,” he says.
“There’s very little standing in your way to go and conquer the whole world.
“If you’re going to go to all the trouble of founding a business, you may as well found it with the biggest ambition you can.”
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.