By Leon Gettler >>
LONGTAIL UX, an Australian start-up that improves website ranking and ad performance on Google, has just secured $5 million in new funding from Investec Emerging Companies Fund to expand into the US and UK markets.
The big question, is how did they do it when businesses are finding it hard to raise cash when the economy is contracting because of COVID-19?
According to the company’s co-founder and co-CEO Andreas Dzumla, it didn’t happen overnight. It followed extensive negotiations with Investec before the outbreak of the pandemic.
“It had been a process of almost three years, of us knowing each other, they know about our business. There was a long relationship,” Mr Dzumla told Talking Business.
He said serious discussions about the funding started in August and got serious in November.
Mr Dzumla said the COVID-19 situation at the beginning of this year changed everything.
“I think everyone in February still saw this as a Chinese problem and even in early March, and then from one week to the other, things changed dramatically,” he said.
DEAL TIMING CHALLENGE
The onset of the pandemic meant Investec had to look at what it meant for them and Longtail had to assess what it meant for its own business.
Mr Dzumla said there was a period of two weeks where no-one really knew what the impact would be. However, in the end both sides had done sufficient due diligence to go ahead with the deal.
Longtail has an extensive client base including Woolworths Group’s Dan Murphy’s, Adore Beauty, Kogan, Booktopia and Yellow Pages.
It’s broad and, as Dzumla says, it’s a good thing it’s not limited to the travel industry.
“It’s so broad, which is why we both felt confident that while it was uncertain times, we could go forward,” Mr Dzumla said.
He said Longtail UX was already expanding overseas with teams in the US and Europe.
The company’s overseas teams had given the company good insights into the impacts of the pandemic as they were more acutely felt in markets such as Spain and the US.
PROFIT FROM LANDING PAGES
Longtail’s software helps companies profit from their landing pages. Its software makes websites more relevant and creates a better user experience.
The software uses artificial intelligence, machine learning and focuses in on key words and search intentions. The company also hosts the systems on its own,
He said Longtail UX had also been at the forefront of remote work and, with its plans to expand overseas, remote working in sales and account management in different time zones would become a key part of its business strategy.
The headquarters, however, will remain in Sydney.
Sales, for example, would be done with video calls and client service is done remotely
The company also had a remote work policy right from the start.
“We are quite well-prepared comparably for the situation” Mr Dzumla said.
“Before this, everyone in the team, every two weeks, could work from home.”
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.