At the start of 2020, we landed our first new customer of the year, Six Barrel Soda Co. As we were bringing on more customers, a deadly virus was hitting global headlines. As directors, we had plans to top-up our personal investment in the business. But with dark clouds on the horizon, we decided it would be a good time to do a large capital raise.
We immediately got strong interest and significant commitments from the first investors we approached. Then lockdown happened.
It was "unprecedented times" as everyone was saying. Everyone and everything went into hibernation. Except a good portion of our customers are essential services, so they kept operating, albeit on a smaller scale. As a software company, we were already operating as a remote business, so the lockdown didn't impact our ability to continue progress on our platform.
A few weeks into lockdown we unexpectedly got a flurry of interest from a range of different investors. Within a matter of days we had pitch calls lined up with VC firms who caught wind of what we're doing. One firm in Australia had done exhaustive due diligence on all the competition and they told us...
“We have no doubt, we back you to win. We've seen all the competitors, we've looked very closely at them all. No exaggeration, it's not even a race in our minds.”
That was extremely encouraging.
As we continued doing pitch calls over Zoom it was becoming clear we were going to oversubscribe – we were seeking to raise $2 million and when it got to the point that offers totalled more than $4.5 million, we decided to cap the raise and close the round at $3.5 million.
So why were investors so keen to put money into a hospitality app while a pandemic is wreaking havoc on hospitality?
- One major thing that's helping hospo survive is tech – and tech adoption is off the charts
- We're proven business leaders – as a founder and chief officer from Xero, we grew Xero exponentially during the GFC
- Our design, our tech and our strategy are all way ahead of any competitor
- We've already had a huge impact on major hospitality operations, who depend on our platform
We've still got a lot to prove and a long way to go. We hope to be an important part of helping hospitality, not just through this crisis, but to dramatically simplify and streamline their operations – increasing their overall sustainability and profitability – while making their day-to-day work much faster and easier.
It also makes a big difference that our app is totally free for hospo to use, for placing all their orders.
Judging by the reaction from our customers, it's already working. We just received a comment today from a customer saying...
"Thanks for your fantastic system! Blissfully easy to use – and so fast that typing this comment is taking longer than ordering stock!"
This is just the start. We've got plenty of major features in the works that will be a huge boost for hospo.
See more coverage here...
- Short radio interview on Newstalk ZB
Investors include Icehouse Ventures (Upstock marked their 200th investment milestone), along with startup founders from Xero, Campaign Monitor, Pepperstone, and others.