RangeMe co-founder Nicky Jackson has had a whirlwind 12 months.
This time last year, the Sydney-founded online marketplace startup had just closed a $5.5 million ($US4 million) funding round that included the likes of Eventbrite founder Kevin Hartz, Uber advisor Steve Jang, Freestyle Capital and Transmedia Capital, and which reportedly valued the business at $16 million.
Now, three years after RangeMe was founded, it has been acquired by US-based marketing company Efficient Collaborative Retail Marketing (ECRM) for an undisclosed sum.
For Jackson, who will continue to work in the business, the experience still feels a bit surreal.
“You always read about it happening to other people. We were talking about a potential partnership, and the CEO of ECRM just asked us ‘would you be interested in acquisition?’” Jackson tells StartupSmart.
RangeMe is an a two-sided marketplace that connects retailers with products and suppliers on-demand. Originally founded in Sydney in 2013, it wasn’t long until Jackson moved the business to Silicon Valley to capitalise on the disruption Amazon had created in the US retail market.
“The US retail market is much more competitive than Australia: Amazon is a big threat, and for retailers to survive in today’s climate they have to innovate quickly with new trends. They’ve wrapped their arms around RangeMe because we are finding innovation at pace,” Jackson says.
It was the startup’s unique industry position that disrupted the market, making RangeMe’s offerings strategically important for ECRM, who was a direct competitor.
Jackson believes achieving this strategic market position was key to getting acquired, and something she suggests other startups should strive for.
“When you’ve got something compelling and are capturing a unique opportunity, people are looking at you, tracking your moves, and the offers will come,” she says.
Her advice for other startups waiting to get acquired is simple.
“Stay at your own pace, keep your heads down, make yourself strategically important in the market,” says Jackson.
Jackson also notes that it’s important for founders to not hold onto their startups for too long, but instead balance founder and shareholder interests.
“You’ve got to recognise the benefits of acquisition early — some companies stay on too long and raise so much capital that it’s hard to sell. The IPO or billion-dollar business is a needle in a haystack,” she says.
“Nine out of ten startups fail, so if someone wants to acquire you, it’s a great opportunity.”
Before its acquisition, RangeMe had expanded to a team of 10 in Australia and 13 in San Francisco. Its marketplace had more than 65,000 suppliers, with 1,000 new subscribers coming on board each week and more than 250,000 items in the marketplace.
The startup’s move to the US had “opened the floodgates” and Jackson contends these numbers wouldn’t have been possible had RangeMe stayed in Australia.
“One of our early-stage angel investors said to us, “‘you’re wasting your time in Australia, you need to go to the US because no one is doing what you’re doing’,” she says.
“Moving to the US was the best decision — you learn, you grow, you iterate. It was about seizing the opportunity for moving into a market with more scope and competition.”
This isn’t to say that relocating to the US is the only hope for Australian startups. In fact, Jackson says RangeMe’s Australian-based tech team was a huge drawcard for venture capital investors in Silicon Valley.
“We were initially told having tech in Australia was going to be a barrier to investment, but VCs appreciated you could get great resources and teams there. Having a Silicon Valley tech team is now a deterrent,” she says.
“In Silicon Valley it’s too expensive to hire engineers because you’ve got the likes of Google and Facebook competing for and poaching the top engineers.”
While it may be beneficial to keep a tech team back home, for those founders looking to follow Jackson’s steps and make the move, preparation is key.
“Do your research, understand the market before you take that big leap, know if you’re solving a problem,” she says.
“Australians have a great reputation for creating awesome startups in Silicon Valley. There’s a great name for tech created in Australia,” she says.