Aussie e-commerce startup Particular Audience has bagged $4.7 million in fresh funding as it gears up for international growth and capitalises on a COVID-19-fuelled online retail boom.
The latest funding round is led by Carthona Capital, and also includes repeat backing from angel investors.
It follows an $800,000 capital injection back in July, which was mainly about mitigating pandemic risks, and allowing founder James Taylor to keep his staff on board.
But, just a few months later, through talking with his investors and advisors, Taylor realised a little more cash could go a long way.
“We realised that by not raising more money we were going to not execute on the opportunity that was at hand,” Taylor tells SmartCompany.
The team is now set to double to 40 people, and the startup is poised to open a new office in Vancouver, adding to its Sydney and London locations.
It has also launched its first consumer product, Similar, a browser plug-in that shows shoppers if they could get a better deal elsewhere.
The business model
Being in the e-commerce sector, Particular Audience has fared relatively well throughout COVID-19. Revenues have tripled since March, Taylor says.
All of that revenue currently comes from sales of the B2B Software-as-a-Service platform, he explains.
The startup essentially provides a layer of AI tech, which changes up product lists and promoted items, depending on the consumer.
As the COVID-19 pandemic has changed consumers’ approach to online shopping, and led to a steep uptick in e-commerce activity, the startup’s focus has been on the bigger end of town.
The product works for retailers that have invested in their digital presence, and have an e-commerce infrastructure, but are looking to optimise the additional traffic they’re seeing — turning that into more conversions.
Retailers typically sign up for a 12-month contract — although Taylor notes the team has just made its first few 24-month contract sales.
But, once those initial contracts expire, the strategy is very much around adaptation, development, and continuing to add value.
Get COVID-19 news you can use delivered to your inbox.
You’ll also receive special offers from our partners. You can opt-out at any time.
“It’s just about making sure the roadmap hasn’t gone stale,” Taylor explains.
The team has built an A/B testing platform into its system, he adds.
“We can prove incrementality that way … we can report down to which particular algorithms are performing or how different product areas are being influenced by something we’re testing.”
It’s ultimately about continuing to solve the problems retailers are facing. Currently, there are retailers growing the number of items offered in their stores. That means they need better filtering systems and better personalisation.
“It becomes a real necessity if they want to grow,” Taylor says.
Growth in unchartered territory
COVID-19 has changed the retail world, and there’s no going back now. So, while riding the growth wave is a good position to be in, being on the cutting edge of progress comes with its challenges too.
So, when you’re trying to keep up with a rapidly shifting market, and meet constantly changing retailer and consumer demands, how do you stay ahead of the game, and bring your customers along on the journey with you?
First and foremost, Taylor says it comes down to education.
“The underlying tech is changing so rapidly,” he says.
“Every few months there’s something that we can do that we couldn’t have done a year ago.”
It’s about turning those technologies into products, pitching them to retailers, and getting them out in the world, he adds.
But, in a year of constant flux, he’s learnt a few things about running a business too.
Look after your people
Some businesses made redundancies earlier in the year, but in retrospect, probably didn’t actually have to, Taylor suggests.
Instead, Particular Audience asked its employees to take a 30% pay cut. That gap in pay was later paid back, in full.
And, Taylor has nabbed some skilled engineers that were let go elsewhere.
“That’s put us in a really strong position, everyone is very bought in and aligned,” he says.
Your employees are the advocates, and the face of your business, he adds. They’re integral to your success.
“It’s really done a lot for team spirit.”
Pivot, pivot, pivot
It’s become a buzzword of 2020, but there’s a lot to be said for agility, Taylor says.
But, the focus should be on how you position the product for your users, and the product it solves.
Through conversations with retailers, for example, the Particular Audience team noted a demand for a tool that could promote overstocked items.
“The tech has always been able to do this,” Taylor explains.
“You’ve got to pivot really quickly to be able to solve those problems, and you may have the solution already.”
Finally, Taylor says if you’re a founder lucky enough to have good investors on board, it’s important to work with them, bounce ideas around and listen to their feedback.
“Especially as a sole founder it can be pretty lonely,” he explains.
“I’ve had a couple of really stressful moments over the past six months, where there’s been a tonne of anxiety and uncertainty.”
Using his investors as a sounding board has been invaluable, he adds.
But, they also helped him recognise the opportunities at hand, rather than just focusing on getting through a tricky time.
As a leader, it’s all about listening, Taylor says — to staff, to customers and to investors.
“So much is changing … you’re better off listening than talking.”