Sydney video content creation startup Vloggi has secured $250,000 in angel investment, in a deal that founder and chief Justin Wastnage says values the business at $2.1 million, before it’s even launched.
The pre-seed funding was led by Brendan Leonard, angel investor and co-founder of data analytics company Capiotech, which sold for $30 million to ASG Group in 2010. The round also included 11 other investors from the tech and travel and tourism sectors.
Now, the startup is gearing up for its seed raise later in the year, targeting a cash injection of $1.5 million.
Founded just last year, Vloggi is the “world’s first collaborative video platform”, Wastnage tells StartupSmart.
The platform allows users to crowdsource short video clips, and compile short videos, whether for social media marketing or simply for sharing experiences.
Using AI, the technology can also select the best clips to create a 60-second highlights reel, without the need for any editing or curating.
Business customers can licence the final videos, with contributors receiving micropayments for their clips. Or, companies will be able to use the technology as a Software-as-a-Service product.
A former journalist, Wastnage has also worked as a video content creator for Microsoft, and as director of the Tourism & Transport Forum. He also previously founded an aviation video channel, Flight TV.
Initially, Vloggi is targeting the travel sector, he explains. Already, it has various pilot customers, including Spencer Travel Group.
“For any business for whom location is important, existing tools don’t work,” he says.
While large tourism boards will have budget to spend on creating their own video content, there are smaller tourism boards and local councils that also demand this content.
“None of them have budget for video,” Wastnage says.
However, the founder says the startup achieved its $2.1 million valuation because of its scope to expand. In fact, he claims the initial external valuation set the figure even higher.
“The key factor is the size of the market,” he explains.
“Even though we started looking initially at travel and tourism, this could be an actual collaboration tool.”
“I got a good vibe”
As the main investor, Leonard says what initially attracted him to Vloggi was Wastnage himself.
“I got a good vibe with Justin,” he tells StartupSmart.
“Then I had a look at the app and I was seriously blown away.”
Of course, the investor isn’t only in it for the love — he intends to see returns, and agrees there’s a huge opportunity here.
“Everyone’s got a high-definition camera these days,” he observes.
Leonard has joined the Vloggi board, and considers himself an active investor in the venture.
An entrepreneur himself, he was at the helm of Capiotech as it scaled. When the business was sold, it had a headcount of about 100 people, he says.
“I’m trying to bring a lot of that sustainable growth to Vloggi,” he explains.
The funding will be put towards legal fees for IP protection, as well as further development of the technology itself.
It will allow the startup to finalise what Wastnage calls its “minimum marketable product”.
While previously it had an MVP, he says, the product couldn’t quite complete the AI-enabled editing process to create a finished video product.
Already, “we’ve almost finished that”, he says.
Finally, the funding will be put towards starting to commercialise. Once he has a finished product, Wastnage has to consider “how do we take it to market?”
It’s here the business expertise of the angel investors comes into play, Wastnage says. It was under their advice the business model pivoted from a marketplace to a SaaS product.
“The function initially was a two-sided marketplace, but actually that’s a very hard thing to do,” Wastnage says.
“Believe your product is going to change the world”
As an angel investor, Leonard says one of the most important things he’s looking for in an investment is someone he can work well with, and who is willing to take advice on board and potentially pivot their business.
“It really comes down to the people,” he says.
“You need someone who can be coachable”.
An investable founder is “passionate, but not stupidly passionate and defensive”, he adds.
No matter how good the idea or the product is, Leonard wouldn’t back something if he didn’t think he could work with the founder.
“You can always change the product, but you can’t change the guy,” he explains.
“Be genuine,” he advises.
“Drop your guard and be passionate about your idea, but also be open to people providing feedback about it.”
Founders should view feedback as an opportunity to improve, and be willing to make changes to help their business succeed.
“You can’t be too scared just to walk away,” Leonard says.
When offering his own advice to other founders, Wastnage draws on a few things he might have done differently.
“Don’t start in Australia,” he says.
“It’s really hard to raise money here.”
Also, in retrospect, he advises founders “don’t do it if you have a wife and kids to support … it puts a huge amount of stress on the relationship”.
However, if you are going to launch a startup, the important thing is to “build something people love”, Wastnage advises.
In the early days, there were a handful of people who could see the potential of Vloggi, but it was difficult to sell the idea when all they could do was talk about it, rather than showing people what it could do.
“It’s only now that the whole thing works end-to-end that people are willing to pay money,” he adds.
This means it’s often up to the founder to maintain the vision.
“Until you execute it and deliver a product people can touch and feel, you don’t get taken seriously,” he says.
“You have to believe your product is going to change the world — which this will,” he adds.
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.