Queensland unicorn SafetyCulture has closed a $99 million funding round, bumping its valuation to a whopping $2.2 billion. But, according to founder and chief Luke Anear, this Aussie startup is only just ramping up to a steep growth curve.
The round was led by Insight Partners, which also recently backed Aussie software startup Octopus Deploy to the tune of $223 million.
Existing investors Tiger Global, Index Ventures and Blackbird also contributed.
The raise comes almost exactly a year after SafetyCulture’s $60 million Series C round, about half of which was directed back to employees, giving them the opportunity to cash out on vested equity.
That also bumped SafetyCulture’s valuation up to $1.3 billion, giving it the coveted ‘unicorn’ status.
And, despite a difficult and uncertain 12 months, the business is growing. This year, annual revenue will pass $100 million, Anear tells SmartCompany.
Over the next seven to ten years, he expects the business to be 200-times bigger than it is today. The investors are simply seizing that opportunity.
“For people to be able to get some of that equity and be part of that journey is a valuable commodity.”
Filling the coffers
Anear and the team had been in conversations with Insight Partners for about three years before finalising the investment in December last year.
And, while the startup didn’t necessarily need the cash — SafetyCulture has been breaking even for more than a year now, and has more than $100 million in the bank, Anear says — the benefits for SafetyCulture were three-fold.
First, the majority of the funding will go towards product development. What started out as a simple checklist app has morphed into “a platform businesses rely on”, the founder explains.
The team is working on building out a tool to clearly show who’s on site at any given time, for example, and to keep track of their training and licence records.
Anear is also working on building a developer marketplace, allowing other engineers and developers to build off of the SafetyCulture platform.
“We’re proving a broader value proposition for our customer,” he explains.
Second, the raise allows Anear and the team to continue to work with “great partners”, he says.
Insight is one of the top software investors in the world, Anear notes, with a lot of experience in scaling businesses.
And, the team is also working on building the SafetyCulture brand, including bringing The Block host Scott Cam on board as an ambassador.
Growth so far has pretty much been organic, Anear notes. It might be about time to invest in some marketing.
Thirdly, and possibly most importantly, the raise allows SafetyCulture to continue offering employees access to equity on a continuous basis.
Cash and culture
Last year, employees only sold down relatively small amounts of their equity, but many still received “life changing” sums of money.
This time, Anear says fewer than 10 employees, out of about 600, participated. Again, they didn’t sell a lot.
“That’s a great sign,” Anear says.
“It means everybody is very confident in the opportunity and the mission ahead.”
Of course, early investors can gain access to their ‘paper wealth’ too. Anear’s dentist was an early investor, pouring $10,000 into the fledgling business, he recalls.
Now, that investment is worth “tens of millions”, the founder says.
“To see his equity and faith he put in us being rewarded is a fantastic thing.”
This is something the founder intends to offer fairly regularly. It means he doesn’t have to rush towards an IPO in order to free up liquidity for shareholders.
But it’s also been a positive in terms of the company culture. People are seeing financial rewards for the hard work they’ve put into building the business.
When you have equity in a business there’s a certain sense of ownership, he notes. But, when that’s turned into dollars in their bank account, suddenly it’s tangible and very real.
“It’s just continued to galvanise the belief that the team has in our mission,” Anear adds.
“It strengthens the sense of purpose across the team every day.”