Baby product review startup Tell Me Baby has raised $5.5 million in funding, as it gears up to enter the lucrative, and very large, Chinese parenting market.
The funding round was led by Cornerstone Growth Capital, while equity crowdfunding platform OnMarket also contributed, as well as running a $500,000 campaign.
The crowdfunding campaign, however, was over in a record two hours, with just two investors contributing.
In the end, “it wasn’t really a crowdfund as such”, Tell Me Baby co-founder and chief Mathew Colbron tells StartupSmart.
“We were headed down that path, but then we had these larger cornerstones who wanted to take out the round.”
Tell Me Baby was founded in 2016 by Colbron and his wife Julia Colbron, who had a six-month-old at the time.
Through their own journey, the new parents recognised a need for more detailed, trusted information on the kinds of childcare products they would need.
“We didn’t know what to buy,” Mathew Colbron explains.
“You’re sort of thrust into this new market of products that you need … We just had no idea.”
The pair created Tell Me Baby in a bid to digitise the experience they had, based on reviews from those who have been there.
As a parent, “you want to hear from other parents in the same situation”, he says.
The platform also offers rewards for high-quality reviews, giving parents points that can be redeemed for Kmart, Coles or Target vouchers.
Now, Tell Me Baby reaches about 600,000 Australian parents every month, and that reach is growing 100% month-on-month, Colbron says.
The startup has seven full-time staff members. The founders have been focusing on growing the executive team, in particular.
Alexie O’Brien, former executive at Lorna Jane and general manager at lululemon, and a previous investor and non-executive director at Tell Me Baby, has come on board as chief operating officer.
“She brings a tonne of experience over,” Colbron explains.
This latest funding round is partly fuelling the launch of Tell Me Baby’s e-commerce platform, which is expected to go live next month.
Currently, the site runs on an advertising model, however, it is now evolving into what Colbron calls a ‘social marketplace’.
“It’s similar to social commerce, which is a big trend at the moment,” he says.
Brands are using platforms like Instagram or Pinterest to sell products, he explains.
“We think we’ve got a better mousetrap, because it’s a review site that’s focused on products.”
Tell Me Baby will work with brands, helping them connect and engage with the community, through replying to reviews or answering questions in a Q&A section.
At the same time, users will be able to click through to purchase products, once they’ve settled on a choice.
The funding will also be focused on boosting the amount of content, and reaching more community members.
Currently, the site hosts about 25,000 reviews. Colbron hopes to double this by the end of the financial year.
However, the big move for Tell Me Baby is a push into the Chinese market.
Already, the team has been attending trade shows and expos in the country. Plus, it has a Chinese site and is on WeChat.
“There’s quite a big demand for Australian baby products in China,” Colbron explains.
“We’re looking to really grow that out.”
This is a huge market with huge potential for a business like Tell Me Baby.
In Australia, there are approximately 230,000 babies born every year, which already provides a constantly renewing customer base for the startup.
In China, there are 17 million babies born each year.
“It’s massive numbers,” Colbron says.
Looking ahead three to five years, the co-founder says there’s a possible IPO on the horizon, although the startup will likely complete another capital raise before then.
However, it all depends on how business is going, he says. There’s also the potential to explore launching in additional Asian markets.
“Particularly in China, and if some of these markets hit, we’re going to need capital,” Colbron says.
“It was like we had twins”
Colbron’s biggest piece of advice for other startups is to surround themselves with the best people they can find.
“You need a lot of help,” he says.
“Being able to attract talent is key, and getting those guys really motivated and hustling.”
It’s important to get a strong team of advisors — “people who have been there and done that” — he says.
In Tell Me Baby’s case, the team bought expertise on board in Alexie O’Brien.
But, of course, from the very beginning, the founding team were family.
Launching the startup with a six-month-old baby in tow was challenging, Colbron says.
“It was like we had twins almost.”
Now, the couple has a new 10-week-old in the house, too.
“It’s really our world — our babies and our business,” Colbron notes.
“We’re fully immersed.”
But the experience of being a husband and wife co-founding team has been a positive one, he says.
“We can talk about it all the time, and bounce off each other and lean on each other when we need to.”