Closing a round of fundraising is generally a huge milestone for many startups. But it can also be incredible hard, complicated work and a stressful affair. Add to that a global pandemic shutting the world down? Doubly so, you would think. We checked in with Roamler, Studytube, Wizenoze and Open Social; all startups from Amsterdam that managed to raise significant funding during lockdown and peak pandemic. How did they manage, how do they look back and what is their advice?
Roamler got themselves worked up
On-demand marketplace for workers Roamler managed to raise a whopping €20 million. Their previous investor Endeit from Amsterdam led the round. Roamler-CEO Jeroen ten Haave started informal conversations with investors in November last year, when the world hadn’t heard of the word ‘COVID-19’ yet. That quickly changed and raising funds while a pandemic was disrupting the world was more excitement Ten Haave bargained for. “I think it was mostly us that were nervous about the situation. The investor clearly said they believed in what we were doing.”
Roamler did not betray that faith. The Amsterdam-based startup got hit hard by the lockdown measures taken all over Europe. A lot of Roamler’s activities take place in stores or at people’s homes.”Together with our clients we determined it was simply not okay to send people there.” After business plunged in the lockdown months of April and May, it instantly picked up once life turned back to normal, says Ten Haave. “In June we were back on the level of February. We went from virtually standing still to business as usual in just two months. I think this proves the strength of our business model.”
With the fresh funding, Ten Haave is looking abroad for Roamler. Highest on the list of priorities is international expansion of Roamler Tech, which employs specialists to install devices, troubleshoot software or help users with new technology. “We’re starting our expansion in the UK. We wanted to roll out in June, but due to the pandemic it got delayed until the end of September. After that, we’re looking at Germany and France, somewhere next year.”
According to Ten Haave, the biggest challenge when setting up in a new market is to onboard new clients and convince them from the new way of working they offer, compared to the traditional model of freelancing or employment. “Our clients are large companies. They won’t change their organisation overnight. But there is huge demand for digitization of processes and workflows. Now that there is uncertainty in the market, this could mean there’s opportunities for us. It strengthens the discussion on how we can help people in a more flexible way.”
Studytube’s deal nearly fell through
“These were the most stressful days of my life”, says Studytube co-founder and CEO Homam Karimi when he recalls the past couple of months. His online learning platform closed a funding round of €10 million with Nordic fund Verdane. Certainly something to celebrate now, but back in March, with the deal 99 percent done, COVID-19 nearly ruined everything. After months of work, all the way through the due diligence phase and beyond the shareholders agreement, everything just needed one official nod from all parties to close. But the same Monday The Netherlands went into a lockdown, Karimi, with the champagne bottle ready to pop, got word the investors pulled out.Â
“At first there were some additional questions from Verdane about the deal. They started to have doubts about investing in new companies because of the uncertain times. But on Monday afternoon we heard the deal didn’t go through.” This meant the agreed upon exit for previous investor Henq also fell through. “Henq was also hit by this. Together with Coen van Duiven [Co-founder of Henq] we worked really hard to make the case for us. Eventually Verdane realized that Studytube was one of the companies that would come out of this crisis better than before. Tuesday after the lockdown went into effect, the deal was signed and done.”Â
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The fact that Studytube is likely to grow during the crisis is already apparent. Karimi identifies two parts of the business: the SaaS-part, which offers an online learning platform for organizations, and a marketplace where one can book educators and training. “The software part really took off”, says Karimi. “Many companies had nothing in place for their employees to train or learn from home. Since March, we have added fifty new organizations.” However the part of the site where training or workshops are offered, fell quiet. Karimi: “The SaaS-part grows way faster than the decline of demand in the marketplace. We’re still looking at 70 or 80 percent growth this year.”
With the funding done, Karimi is looking across the border for Studytube. “From 2021 we plan to expand across Europe.” One way to do so is organic, by starting to offer their product on new markets. But Karimi is also looking at acquisition of other parties to accelerate their growth. “There are many legacy learning management systems in Europe that were founded ten or fifteen years ago and make a nice profit now without ever receiving any funding. But those founders will probably ask themselves if they can keep competing on their own. I don’t believe Europe will have hundreds of different companies offering the same, when it comes to online learning. There will be two or three big parties, and we want to be part of that.”Â
Wizenoze had VCs lining up
Another Amsterdam startup reaping the rewards from a sudden shift to homeschooling is Wizenoze. This edtech startup sifts through online content to only offer students educational gold. According to Wizenoze, COVID-19 got 1,5 billion students stuck at home, all dependent on online information to support their online learning. This meant usage of Wizenoze surged, says co-founder Diane Janknegt: “Due to Corona, we have seen a growth of up to 300 percent in usage with some of our customers.” With growth and a potential market like that, no wonder the startup managed to close a growth-stage funding round of reportedly €4 million.Â
Soon after schools all over the world started to close down, investors also started to see the huge potential of Wizenoze, says Janknegt. “Like most entrepreneurs, we started the lockdown by looking at our cash flow and run rate. With these details in mind, we decided to accelerate the fundraising. In the beginning, it was a bit tough, but a couple of weeks after starting, it turned around. Suddenly, many more investors did understand the potential value of offering educational content through the internet. In the end, our round was hugely oversubscribed.”
This luxurious position meant Janknegt had something to choose. She says she was able to double their initial ask, pick the best profile of investors and the friendliest terms. Janknegt: “In the end, we created what I call a ‘dream team’ of investors.” With this team and the funding, Janknegt is ready to expand Wizenoze worldwide. “We will focus our international growth on India and the Middle East. Our strategic headquarters are in London, which will remain our key market. And of course, we can also expand in the Benelux. We also experienced a lot of interest from overseas. Several conversations are still ongoing.”
Open Social’s early networking paid off
Fundraising during a global pandemic doesn’t have to be a stressful affair. Take Open Social, the startup from Amsterdam that offers everything for companies and organizations to create and maintain online communities. After previous round of crowdfunding, their first round of funding with VCs, €1,25 million, took a bit longer than expected to realize. But founder Taco Potze was never worried. “My advice for other startups is to make early contact with VCs in The Netherlands. They are generally willing to hear your story and have a cup of coffee, especially if you already have a product and clients. This allows you to build your network, and prevents you from fundraising with only a couple of months runway left.”Â
That is exactly what Potze did. He started his first meetings in the summer of last year. “We heard that closing a round could take up to 9 months. So we started early, in keeping with the knowledge of ‘don’t ask for money, ask for advice’. This is a nice way to get in contact with VCs and a good way to know which can offer smart money.” After the first meeting at Peak Capital, which ended up as their main investor, Potze participated in a session about growing sales held by the VC. “This made it easier to eventually close the round.”Â
After some progress in talking with the investors came COVID-19, shutting the world down. Potze: “This was a huge shock. VCs wanted to know how corona proof your concept is.” Very, would’ve been Potze’s answer. According to the startup COVID-19 had no negative effect and when it comes to growth they are having their best year since starting in 2016. Potze: “Many companies moved their budgets to online and remote working, which works in our advantage. We didn’t lose any customers and added quite some projects.” Potze had some questions for VCs as well. “We really wanted to know how companies in their portfolio were doing and what would be the consequences for their funds.” All in all the funding got delayed for a couple of months, says Potze.
The significant funding allows Open Social to do some serious hiring, especially in the department of sales and marketing, says Potze: “We always bootstrapped, so now we can invest in those areas. This will allow us a stronger foothold in Europe and the US. We also want to expand our support, to process tickets faster.” Potze is looking to double the team of 20 people currently working for the startup. “Now is a good time for vacancies. There are many ambitious people who are laid off, or looking around for something else. Compared to a year ago, we see better candidates.”
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