I am thrilled to announce our $4.8m investment into Zipline. Our investment represents EVP’s largest ever first-round commitment to a business. This reflects our strong conviction around Zipline, its team and the market opportunity before us. This is also a deal that has been years in the making. Here’s our investor notes...
An investment process that took 3 years...
Across the venture echo-chamber of twitter, memes and hype, much is being made of rapid-fire funding raises, cheap capital and our friends at Tiger Global’s unique deployment strategy. But within our small corner of the ANZ market, we continue to have great success in building genuine partnerships with founders, well before an investment is on the table, that ultimately do lead to a commercial relationship over the journey. After all, the decision to invest is a decade long, irreversible commitment.
Avoiding compressed funding decisions leads to several benefits:
- We have the chance to confirm genuine alignment between EVP’s objectives and the founder’s ambition.
- We get a front row seat to observe performance and build an informed perspective around capability of the team.
- We have additional time in the water to start to understand specific sectors, market dynamics and other nuances specific to the company. We can build prepared minds as a result of speaking to many startups/experts in the given industry to build an understanding of product advantages and small nuances that differentiate startups from incumbents.
- At EVP we are actively seeking to work with startups where we can assist in the journey, and not simply be passengers. Taking the time to consider whether we can live up to this promise is only possible with the benefit of time.
Indeed, many founders today are actively avoiding the rapid funding rounds led by US funds with enormous piles of cash to deploy. Giving equity to an investor is an almost irreversible decision, and some founder types prefer a more deliberate and careful approach to capital partner selection.
Our investment into Zipline follows the above pattern. I first met Michael in 2018 when he was focused on building RateIt, a customer experience platform for physical retailers. While we were unsure about the product at that stage, we were totally sure about Michael’s capability. Michael’s thirst for knowledge, inbuilt curiosity, exceptional communication and leadership skills, are qualities readily identifiable through our interactions. As you can see in the below email, this was a team we wanted to work with.
And so in around May of this year, I received an email from Michael suggesting we catch up. Given the impact of the pandemic on physical retailers, I was expecting the RateIt business to be facing major headwinds. As it happened, our catch up turned out to be 180 degrees in the other direction. Instead, I heard an update full of growth pains, struggles in keeping up with inbound demand and a move towards servicing the hospital and aged care industry. All of this on a negligible capital base and during the pandemic. Michael’s strong leadership capabilities was coming to the fore as he steered the business to new heights despite the stormiest of macro conditions.
And so, as per my email to fellow partner Dan all those years ago, we were about to have the chance to work with the team….
Zipline is Born
Over the years since we first met in 2018, RateIt has developed into Zipline, a multi-product company with three core offerings:
Zipline - a product streamlining key workplace processes (like visitor and contractor compliance). It is loved by customers across the Health sector such as St Vincent’s, Regis & Calvary Healthcare.
RateIt by Zipline - a product gathering in-the-moment feedback to improve the customer experience (CX). It is relied upon by customers such as Adidas, 7Eleven, Coles & Mitre10.
6Q by Zipline - a product tracking a team's mood, sending 6 short questions (which change each week). It has proven to boost culture, spot employee churn risks and uncover true team sentiment.
As of today, the Zipline team consists of Australia's best technology and startup talent. Having watched Michael assemble the current team over the last four years, the investment case became self-evident as the business attracted some of our best minds to solve challenging software problems. In many respects the team is the core asset Zipline possesses and we are fortunate to be supporting them as the capital partner on their journey.
Watching the Zipline solution be spun out of an existing software platform in the midst of the pandemic, we were particularly impressed by the team's ability to solve problems very quickly and the pace of rapid customer adoption within the hospitals and aged care market. The Zipline product is growing at over 800% annually and has achieved clear product market fit in short order. The level of customer advocacy and the clear product advantage in market gives us great confidence around our investment and the future of the business. It is rare to find an early stage enterprise software business with such momentum. We don’t see this trajectory abating in the short term, with the existing customer base underpinning continued revenue growth on the back of a very significant expansion revenue opportunity.
Much of this conviction has stemmed from the on site observations at various Zipline customer sites we completed as part of our due diligence process. The tangible benefits that ensue from replacing the pen and paper sign in book at reception with a hardware/software solution were immediately apparent. No queuing, no manual double-entry, real-time tracking of persons on site and compliant proof of vaccination statuses. Necessities that are no longer optional post the pandemic. Indeed facilities now face > $100k on-the-spot fines for failing to appropriately check visitor’s proof of vaccine. We watched as the receptionist proceeded with higher value work, or left the front desk to care for residents, while visitors seamlessly interacted with the Zipline solution independently. The underlying complexity of Zipline’s “slot management” rules engine remaining inconspicuous below the surface of the user’s interaction. There was something beautiful about the simplicity of how people use Zipline or the feedback from Margaret at Ashfield Baptist Homes: “yup, it does the trick”.
The visitor management software market seems competitive from the outside. We have spent some years getting to know the various players and have been following closely during 2021 as Sine was acquired by Honeywell, SwipedOn was acquired by SmartSpace and WhosOnLocation was acquired by MRI in a space of a few months. The category is clearly playing with significant tailwinds resulting from the pandemic. As economies reopen, many sectors are having to think through their compliance, health and reporting requirements as they return to in-person interaction. We believe several shifts have already occured in the way businesses monitor people entering their physical locations, and we consider these changes to be permanent.
The Zipline product remains a clear standout in the way their customers interact with the solution and the business outperforms its peer group in terms of growth rates and the underlying metrics of the business. Our strong belief in the team is reflected in us making EVP's largest first investment into any business in our history.
Becoming a Zipliner
I am particularly excited to be working with a new group of co-investors in King River Capital, Tin Men Capital and Wavemaker. In my mind, the Zipline business has the right capital partners to support the business over the long term: a strong mix of B2B software specialists with specific access to overseas networks, relevant portfolio companies and talent pools to introduce to Zipline. Most importantly, everyone passes the “no dickheads” acid test.
During our recent diligence process we met with many additional team members beyond simply Michael. Britt, Mark and myself spent time with Ivan, Tanmay, Kendall, James, Peter, Murli, Sam, JP, AJ, Emily, Jack and Ajay amongst others. During one such meeting, the leadership team walked us through their operating playbook. I remember sending Britt a slack message that simply read: 👀. Based on Verne Harnish’s Scaling Up and Jaco van der Kooij’s Blueprints for a SaaS Organisation the team has adopted an astonishing way to run a scaling startup. The organisation’s focus is centred around a select group of evergreen key indicators, with accountability and objective measurement of progress shared weekly and with radical transparency. This isn’t your typical OKR framework. Individual responsibility cascades throughout the team in a way that drives both individual performance but also shared ownership. Unique in Australia and totally transformative.
This is a team full of accountability, high performance and talent. It’s a business with a fast paced cadence, totally optimised for scale. Zipline is a place where you are empowered to run at opportunities and given the responsibility to execute.
Simply put, this would be one of the best teams I’ve observed in the Australian startup market. If you are interested in 1) leaving a boring corporate job to experience a more dynamic environment, 2) looking to move from being a cog in a big tech company’s machine where having a real impact is not possible or 3) finishing a uni degree and thinking about entering the workforce, please reach out about filling one of Zipline’s 40+ new roles to fill in 2022. If you don’t trust me, why not check this out!
I am thrilled to announce our $4.8m investment into Zipline. Our investment represents EVP’s largest ever first-round commitment to a business. This reflects our strong conviction around Zipline, its team and the market opportunity before us. This is also a deal that has been years in the making. Here’s our investor notes...
An investment process that took 3 years...
Across the venture echo-chamber of twitter, memes and hype, much is being made of rapid-fire funding raises, cheap capital and our friends at Tiger Global’s unique deployment strategy. But within our small corner of the ANZ market, we continue to have great success in building genuine partnerships with founders, well before an investment is on the table, that ultimately do lead to a commercial relationship over the journey. After all, the decision to invest is a decade long, irreversible commitment.
Avoiding compressed funding decisions leads to several benefits:
- We have the chance to confirm genuine alignment between EVP’s objectives and the founder’s ambition.
- We get a front row seat to observe performance and build an informed perspective around capability of the team.
- We have additional time in the water to start to understand specific sectors, market dynamics and other nuances specific to the company. We can build prepared minds as a result of speaking to many startups/experts in the given industry to build an understanding of product advantages and small nuances that differentiate startups from incumbents.
- At EVP we are actively seeking to work with startups where we can assist in the journey, and not simply be passengers. Taking the time to consider whether we can live up to this promise is only possible with the benefit of time.
Indeed, many founders today are actively avoiding the rapid funding rounds led by US funds with enormous piles of cash to deploy. Giving equity to an investor is an almost irreversible decision, and some founder types prefer a more deliberate and careful approach to capital partner selection.
Our investment into Zipline follows the above pattern. I first met Michael in 2018 when he was focused on building RateIt, a customer experience platform for physical retailers. While we were unsure about the product at that stage, we were totally sure about Michael’s capability. Michael’s thirst for knowledge, inbuilt curiosity, exceptional communication and leadership skills, are qualities readily identifiable through our interactions. As you can see in the below email, this was a team we wanted to work with.
And so in around May of this year, I received an email from Michael suggesting we catch up. Given the impact of the pandemic on physical retailers, I was expecting the RateIt business to be facing major headwinds. As it happened, our catch up turned out to be 180 degrees in the other direction. Instead, I heard an update full of growth pains, struggles in keeping up with inbound demand and a move towards servicing the hospital and aged care industry. All of this on a negligible capital base and during the pandemic. Michael’s strong leadership capabilities was coming to the fore as he steered the business to new heights despite the stormiest of macro conditions.
And so, as per my email to fellow partner Dan all those years ago, we were about to have the chance to work with the team….
Zipline is Born
Over the years since we first met in 2018, RateIt has developed into Zipline, a multi-product company with three core offerings:
Zipline - a product streamlining key workplace processes (like visitor and contractor compliance). It is loved by customers across the Health sector such as St Vincent’s, Regis & Calvary Healthcare.
RateIt by Zipline - a product gathering in-the-moment feedback to improve the customer experience (CX). It is relied upon by customers such as Adidas, 7Eleven, Coles & Mitre10.
6Q by Zipline - a product tracking a team's mood, sending 6 short questions (which change each week). It has proven to boost culture, spot employee churn risks and uncover true team sentiment.
As of today, the Zipline team consists of Australia's best technology and startup talent. Having watched Michael assemble the current team over the last four years, the investment case became self-evident as the business attracted some of our best minds to solve challenging software problems. In many respects the team is the core asset Zipline possesses and we are fortunate to be supporting them as the capital partner on their journey.
Watching the Zipline solution be spun out of an existing software platform in the midst of the pandemic, we were particularly impressed by the team's ability to solve problems very quickly and the pace of rapid customer adoption within the hospitals and aged care market. The Zipline product is growing at over 800% annually and has achieved clear product market fit in short order. The level of customer advocacy and the clear product advantage in market gives us great confidence around our investment and the future of the business. It is rare to find an early stage enterprise software business with such momentum. We don’t see this trajectory abating in the short term, with the existing customer base underpinning continued revenue growth on the back of a very significant expansion revenue opportunity.
Much of this conviction has stemmed from the on site observations at various Zipline customer sites we completed as part of our due diligence process. The tangible benefits that ensue from replacing the pen and paper sign in book at reception with a hardware/software solution were immediately apparent. No queuing, no manual double-entry, real-time tracking of persons on site and compliant proof of vaccination statuses. Necessities that are no longer optional post the pandemic. Indeed facilities now face > $100k on-the-spot fines for failing to appropriately check visitor’s proof of vaccine. We watched as the receptionist proceeded with higher value work, or left the front desk to care for residents, while visitors seamlessly interacted with the Zipline solution independently. The underlying complexity of Zipline’s “slot management” rules engine remaining inconspicuous below the surface of the user’s interaction. There was something beautiful about the simplicity of how people use Zipline or the feedback from Margaret at Ashfield Baptist Homes: “yup, it does the trick”.
The visitor management software market seems competitive from the outside. We have spent some years getting to know the various players and have been following closely during 2021 as Sine was acquired by Honeywell, SwipedOn was acquired by SmartSpace and WhosOnLocation was acquired by MRI in a space of a few months. The category is clearly playing with significant tailwinds resulting from the pandemic. As economies reopen, many sectors are having to think through their compliance, health and reporting requirements as they return to in-person interaction. We believe several shifts have already occured in the way businesses monitor people entering their physical locations, and we consider these changes to be permanent.
The Zipline product remains a clear standout in the way their customers interact with the solution and the business outperforms its peer group in terms of growth rates and the underlying metrics of the business. Our strong belief in the team is reflected in us making EVP's largest first investment into any business in our history.
Becoming a Zipliner
I am particularly excited to be working with a new group of co-investors in King River Capital, Tin Men Capital and Wavemaker. In my mind, the Zipline business has the right capital partners to support the business over the long term: a strong mix of B2B software specialists with specific access to overseas networks, relevant portfolio companies and talent pools to introduce to Zipline. Most importantly, everyone passes the “no dickheads” acid test.
During our recent diligence process we met with many additional team members beyond simply Michael. Britt, Mark and myself spent time with Ivan, Tanmay, Kendall, James, Peter, Murli, Sam, JP, AJ, Emily, Jack and Ajay amongst others. During one such meeting, the leadership team walked us through their operating playbook. I remember sending Britt a slack message that simply read: 👀. Based on Verne Harnish’s Scaling Up and Jaco van der Kooij’s Blueprints for a SaaS Organisation the team has adopted an astonishing way to run a scaling startup. The organisation’s focus is centred around a select group of evergreen key indicators, with accountability and objective measurement of progress shared weekly and with radical transparency. This isn’t your typical OKR framework. Individual responsibility cascades throughout the team in a way that drives both individual performance but also shared ownership. Unique in Australia and totally transformative.
This is a team full of accountability, high performance and talent. It’s a business with a fast paced cadence, totally optimised for scale. Zipline is a place where you are empowered to run at opportunities and given the responsibility to execute.
Simply put, this would be one of the best teams I’ve observed in the Australian startup market. If you are interested in 1) leaving a boring corporate job to experience a more dynamic environment, 2) looking to move from being a cog in a big tech company’s machine where having a real impact is not possible or 3) finishing a uni degree and thinking about entering the workforce, please reach out about filling one of Zipline’s 40+ new roles to fill in 2022. If you don’t trust me, why not check this out!