Keeping investors as informed as possible is the secret to ensuring they’ll be willing to chip in more money down the track, SafetyCulture CEO Luke Anear says.
The health and safety software startup has just closed a $6.1 million series A funding round, valuing the company at $50 million.
Most of the money for the new round came from previous investors including Atlassian co-founder Scott Farquhar.
Diligently keeping these investors informed of the company’s operations, even when a funding round isn’t open, is crucial to keeping them on board in the long term, according to Anear .
“It definitely helps when you’ve got existing investors supporting what you’re doing,” he says.
“Some investors like Scott are much more heavily involved, but it’s important to keep everyone informed in terms of what the challenges and opportunities are.
“When it comes around to making a funding decision, investors will feel more informed and they’re then able to make the decision to fund again.
“Transparency is really undervalued. It’s important to have people feel like they’re involved as much as they want to be.”
However, it’s important to make sure this doesn’t get in the way of running the business, according to Anear.
“You have to balance what can be a distraction,” he says.
“You have to find a balance between having their input and making them informed and getting on with running the company.”
Checklist to success
The $6.1 million funding round follows a $2 million round at the end of last year, and a $3 million capital injection in 2013, bringing the total amount of capital raised by the Townsville-based startup to over $11 million.
The software development company’s flagship product is checklist inspection app iAuditor, which launched in 2012. The app allows users to complete mobile safety audits using a library of over 55,000 safety inspection checklists.
The app now has nearly one million downloads worldwide.
Anear says the new funds will be used to expand the engineering team, and begin work on the sales and marketing side of things.
“We’re maturing as a company as we move through the different stages,” Anear says.
“The seed round is very much a trial and error of understanding the market and customers, and iterating to a product that fits with that.
“We’re now at a point where we have a team that has a lot of domain knowledge, and the next step is to grow the customer base and implement strategies to develop the company and take things further.”
A focus on engineering
The biggest part of this will be growing SafetyCulture’s engineering department, although Anear says they’ll still be adopting a lean approach.
“The traditional approach is that you need massive teams to reach global customer bases, but then you look at very small executions like WhatsApp, where they did most of the work with 30 engineers,” he says.
“There are some examples of how small teams can have a very big impact.
“There’s every chance we could double the size of our team to 90. But we don’t necessarily see that we have to have hundreds and hundreds of people to deliver world-class products around the globe.”
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Denham Sadler is a former editor of StartupSmart. He was previously a journalist at the publication and has worked as a freelancer for the Guardian, the Saturday Paper and the ABC. In his spare time he likes puns and jaffles.
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