While COVID-19 has put an end to startup and networking events as we once knew them, the rise of virtual alternatives may lead to unexpected positives for startups, as international investors tune in to Aussie events.
Sydney co-working space Fishburners has given its events space a post-COVID upgrade, allowing for hybrid and virtual events, complete with professional camera equipment and an in-house AV technician.
It’s intended to allow startups to continue reaching large audiences, and a wide range of potential investors, without having to rely on large group gatherings.
For video content startup Vloggi, a live-streamed pitch led to interest from investors not only in other parts of the country, but from Argentina and Saudi Arabia too.
Founded by Justin Wastnage in 2018, Vloggi is a collaborative video platform allowing users to crowdsource clips to create 60-second content reels.
The startup secured $250,000 in angel funding in May last year, giving it a $2.1 million valuation before it even launched.
“We were sitting in a fairly nice position before COVID,” Wastnage tells SmartCompany.
Back in December, Vloggi won StartCon’s ‘Pitch for $1 million’ competition, and was set to compete in the final in Kuala Lumpur in March.
“That was postponed, and then eventually cancelled,” he says.
The founder was also on schedule to close a $500,000 round of funding in April. In fact, it was looking like the round would be oversubscribed.
But, ultimately, the share agreements were sent out just as the reality of COVID-19 hit home, he recalls.
“Suddenly, all these investors went nervous,” he says.
Vloggi was also selected to be part of the government’s Landing Pads program, and was preparing for a stint in Tel Aviv, intended to kick-start its international footprint.
And, the startup had been selected to take part in an accelerator in Seattle.
It was also gearing up for a much larger $2.5 million seed round before the end of 2020, which is now likely to be postponed.
Pitching from a safe distance
So, having resumed its residency at Fishburners in the Sydney Startup Hub, Vloggi was in the market for funding.
And, while many of Wastnage’s 2020 plans had been turned upside down, he was still taking part in the Future Up accelerator program, run by Fishburners and the University of Technology Sydney, which was holding a live-streamed pitch night.
Because of social distancing rules, there were only between 30 and 50 people in the room, he recalls.
“Initially, we were worried,” he says
“Obviously one reason for doing pitch nights is to get in front of investors.”
The founder knew the event was being live-streamed though, and had sent the broadcast link to one or two prospective investors himself.
But he had no idea how many people were watching, and he certainly didn’t anticipate people tuning in from overseas.
An Argentinian investor reached out via shared contacts, as did another viewer on the Gold Coast.
But, when the investor from Saudi Arabia — an Aussie expat — reached out, Justin was taken aback, to say the least.
“I put my mobile phone number on the end of the presentation … I just got this WhatsApp out of nowhere,” he recalls.
“Initially, I replied a little bit hesitantly,” he says.
This was a text from an unknown number claiming to be interested in investing in his business, after all.
“We swapped emails and then we did a proper Zoom pitch.”
Now, conversations with all three are progressing, although nothing is set in stone yet, and Wastnage is not getting ahead of himself.
But these are serious investors, he says. If all the funding comes through, he could be looking at a round bigger than the one he had lined up earlier in the year.
“If they come off, it will be very worthwhile.”
Like so many startups and other businesses, it’s been a roller-coaster year for Vloggi, and one Wastnage never could have predicted. But, despite all the disappointments, he says, in the end, the experience might leave the startup in a stronger position.
“We basically spent last year finalising the product, going repeatedly back to customers and finetuning the features,” he says.
“We were ready to launch.”
Then, the funding they had expected to receive didn’t land. What’s more, the launch was focused on customers in the travel and tourism business.
“When we looked at who the launch vertical was, travel and tourism made the most sense,” Justin says.
“We had the go-to-market strategy planned, we had all these investors lined up, accelerator programs and the chance to go to Tel Aviv … and then we had it all taken away from us.”
After spending about two weeks reeling from the shock, Justin and the Vloggi team set to work rebuilding the platform and looking for new launch markets.
“We found all these other markets for crowdsourcing video that we didn’t think of before,” he says.
The startup is now working with a large national tyre-fitting chain, as well as beauty brands, charities, universities and even broadcasters.
“It was good in a way,” Just says.
“It forced us to become a horizontal tool, rather than a very vertical tool.”
And, the startup is back on track to launch its larger round in the not-too-distant future. The founder has been talking to a major Aussie VC who has expressed interest in leading the raise.
One of the things that has caught the investor’s eye is the startup’s resilience, Justin says, which has certainly been tested this year.
“Everything has been thrown at us, and we just keep on going,” he explains.
“We change what we need to, and then go back at it.”
You can help us (and help yourself)
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.