Another Unicorn born in Oz – Employee survey start-up Culture Amp worth $1b and climbing
Culture AMP has raised USD150m and is the latest Ozzie startup to become a unicorn!
The founders
Didier Elzinga, founded Culture Amp alongside Jon Williams, Doug English and Rod Hamilton in 2009 with a core mission of building a better world of work.
They started the company in 2009 with the “world’s most naive business plan” of achieving 10,000 customers, generating $US10,000 in revenue each, equalling $US100 million in revenue.
10 years on this goal has been met ….
Next mission is to hit 100 million users – 1pc of worlds population.
What it does
Culture Amp uses data gathered from staff surveys to advise companies on how they can change workplace culture, improve performance and create better work environments.
The company has between 3 million and 5 million users across 2500 companies and employs around 400 people.
It’s customers
Culture Amp customers include Airbnb, GoCardless, McDonald’s, Salesforce and Slack
About two-thirds of its revenue is generated in North America, which Mr Elzinga predicts will remain the case for the next few years, but the company is committed to building up its European presence and expanding more into Asia.
“every market is moving to the fact that people matter more and culture is an amplifier” Mr Elzinga said.
Capital raised from blue chip VCs
US150 million has been raised to date with the last round of $US82 million being raised at a USD700m Valuation in a round led by renowned investor Sequoia Capital China together with Global Founders Capital and TDM Growth Partners.
It raised $US40 million in a round led by Blackbird Ventures with other investors being Sapphire Ventures, Felicis Ventures, Index Ventures, Blackbird Ventures, Hostplus, Skip Capital and Grok Ventures.
Having already been a customer of Culture Amp for two years, Sequoia China came on board as the lead investor after its head of HR championed the product internally.
“The substantial investment in this stage of Culture Amp’s growth underscores our confidence that it has in the vision and the leadership team in place to help companies take action on complex workplace issues. Culture Amp has carved out a dominant niche in the global market,” Sequoia Capital China partner Steven Ji said.
The business bootstrapped to $1 million in revenue and then did their first raise out of the US from Felicis.
Failures
It took three attempts for Culture Amp to find its feet and settle on its current product of real-time employee engagement surveys that deliver insights for employers on their staff and businesses.
“Scaling a startup from zero to $1 million is the “impossible” piece, while the second stage of growth from $1m to $10m is just “really hard” says Elzinger
The processes, systems and people you need for a $1m is totally different to what you need as a $10m and different again for a $100m company.
The secret is to realise this need and act on it
They started out trying to solve a performance management problem of performance reviews – something everyone hated…. but had to pivot as the business wasn’t getting traction .
In January, the company came full circle when it acquired Zugata, a company which has overhauled traditional performance reviews – making them forward looking and more positive!
Mentors
Elzinga looked at Atlassian’s business model and realised Mike Cannon-Brookes and Scott Farquhar had nailed it!
It takes practice consistency and grit to make things look easy!
“It’s like when you hear athletes talk about the fact that on game day, they’re not that stretched because you just have to play. You put in all the work and then it will happen,” says Elzinger.
Inspired by Yolanda Redrup Reporter -yolanda.redrup@afr.com.au – Sep 4, 2019 https://www.afr.com/technology/employee-survey-start-up-culture-amp-worth-1b-and-climbing-20190827-p52lcj
