Thought waves on seed venture

A new software era is here. It doesn’t just store your data, it does the work for you.

For decades, enterprise software was built around Systems of Record: authoritative databases where structured information lived. Think ERPs, CRMs, or EHRs. These systems were valuable because they democratised access to critical information. For startups, they were hard to displace. They became the default axis of influence in every organisation: inflexible, centralised, and (mostly) passive.

We believe AI is breaking that model.

We’re entering the age of the System of Work: software that doesn’t just manage data, it does the work. These AI-native systems generate the actual deliverables: the compliance document, the diagnosis summary, the customer reply, and the inspection report. They collapse the distance between insight and action.

This isn’t a UX upgrade. It’s a paradigm shift in how work happens.

What is a System of Work?

A System of Work will autonomously perform productive tasks. It’s not a place you go to see what needs doing, it’s the system that actually does it. That might look like:

• An AI agent that resolves a customer ticket end-to-end
• A generated legal contract tailored to a specific jurisdiction
• A clinical platform that drafts summaries and actions from messy encounter notes

Where legacy tools required human intervention to interpret and act, Systems of Work incorporate agentic behaviour: they act on their own, within guardrails. They represent a new kind of software stack: data, model, workflow and output, all in one loop.

These systems are defined by a few key traits.

• Agentic behaviour: They initiate actions rather than waiting for human prompts.
• Embedded actions: They do not just suggest what to do. They complete the task directly within the system.
• Workflow ownership: They become the go-to place where work is created, reviewed, and shipped.
• Outcome-based value: They are priced and evaluated based on the results they deliver, not just on features or access.

Why the record → work shift matters

In a world of Systems of Work, the traditional axis of influence in software is beginning to lose relevance. The classic “source of truth” may still exist somewhere in the stack. However, the source of productivity, the system where outcomes are created, will shift.

Once a system starts producing core business outputs, it becomes exponentially more valuable and much harder to displace. This creates a new kind of competitive advantage. Systems of Work do not only benefit from access to data. They generate new, proprietary data through use. They encode human expertise, automate repeatable decisions, and improve over time. These effects compound, and become self-reinforcing advantages that deepen with every interaction.

This shift also changes the economics of software adoption.

• From insight to execution: No more offline handoffs. Work gets done where the data lives and the value is immediate and obvious.
• From user-as-operator to user-as-editor: Humans go from clicking buttons and entering data to reviewing AI-generated output.
• From seat-based pricing to outcome-based monetisation: Business models shift toward per-task or per-output models, unlocking new budget lines tied to productivity.
• From “jobs to be done” to “roles to be done”: AI systems take over full professional roles, not just isolated tasks enabling full workflow ownership.
• From software tools to workflow axis of influence: These systems become the gravitational centre of daily operations. Frontline teams feel the value directly, not just IT buyers.

How Vertical AI is powering this shift

This transition is most visible in Vertical AI: AI products built specifically for the needs of one industry. These aren’t generic LLM wrappers. They embed into frontline workflows and solve the hard, boring, expensive problems unique to sectors like healthcare, logistics, construction, and financial services.

The most advanced Vertical AI systems:

• Combine deep domain knowledge with powerful models
• Build proprietary data moats by capturing interaction-specific context
• Deliver real-world value through actionable outputs, not just dashboards

And crucially, they don’t just make software smarter, they replace entire layers of human effort.

Industries will not just adopt AI. Industries will be restructured by AI

Systems of Work will drive the biggest changes in industries where work is still manual, complex, or repetitive.

Winning without replacing

Smart AI startups are using over-the-top (OTT) strategies to enter these workflows. Rather than attempting to displace existing systems of record, they adopt a wedge strategy to layer in value → starting with simple value-additive propositions like:

• A co-pilot layered on top of an EHR system
• A transcription layer that starts automating follow-up actions
• A reporting tool that gradually becomes the system of work for compliance

Once embedded, these tools don’t just assist, they absorb the workflow. Once the workflow is absorbed, the product has direct access to the tacit knowledge that the human uses to complete a task end-to-end. Access to this ‘grey’ data area helps feed and improve an autonomous neural network, which becomes an expert on the specific task required.

Final thought

The System of Record defined the last era of enterprise software. The System of Work will define the next. We don’t know what that means for Systems of Record, maybe some of them will be able to participate in the System of Work revolution as well. We are focused on finding the founders who are willing to tackle the ‘work’ problem from scratch. The pathways to achieving a System of Work are complex and multi-layered. The optimal way to build toward a System of Work will vary by use case, user archetype, and industry.

Join us from the leading edge of Vertical AI startups, as we publish our live thinking on building Systems of Work.

Minikai is a game-changing AI platform revolutionising the disability and aged care sectors by transforming tedious paperwork into automated magic. By taking care of the heavy administrative lifting, Minikai empowers care providers to do what they do best - provide exceptional care to those who need it most.

We're thrilled to have led Minikai's Seed round, partnering with the team to revolutionise how care providers operate in highly regulated sectors through AI-powered automation. As your AI ally in disability and aged care, their platform transforms the workflow of frontline care providers by automating administrative work and compliance reporting, enabling them to focus more time on patient care while building a powerful trust platform between regulators and providers.

Markets with tailwinds

The aged care and disability sectors present a massive opportunity, with $50bn in government funding in Australia alone. These sectors face mounting challenges that create perfect conditions for technological disruption:

• Critical administrative burden with compliance teams spending over 50% of their time on audits and paperwork
• Providers face fines exceeding $1.5 million for compliance breaches
• Tens of thousands of incidents go unreported every year due to complex reporting requirements
• Training staff costs $230,000 per 100 clients annually
• Growing regulatory pressures with new mandates requiring minimum care minutes per resident
• Widespread inefficiencies costing care providers and the government billions in tax dollars annually

The timing for Minikai's solution is particularly compelling as generative AI reaches maturity. Unlike traditional software which often requires structured data input, GenAI can process unstructured information like clinical notes and conversations, enabling true hands-off automation. This technological shift coincides with government initiatives funding AI pilots to improve efficiency and care standards.

Products that change the game

Minikai's AI-powered platform stands out through several innovative features that fundamentally transform how care providers work:

• Collective memory: A sophisticated implementation of long-term memory for LLMs that maintains continuity of care across multiple providers
• Context-aware personalisation: Dynamic UI components that adjust based on user roles and preferences
• Automated documentation: Converts conversations and interactions into structured reports and compliance documentation
• Mini agents: Each patient gets a dedicated AI agent that understands their specific needs and history

The platform delivers concrete benefits across three key areas:

1. Reporting: Makes incident reporting user-friendly for carers and 50% faster for compliance staff
2. Quality & safeguarding: AI agents instantly scan all documents and identify compliance gaps
3. Always-on audit: Instantly compile evidence from a live, self-serve dossier

Early results are compelling, with customers like SDA Services seeing dramatic improvements in efficiency, particularly in processing intricate SDA and SIL applications. The platform is already trusted by care providers supporting over 150,000 vulnerable Australians annually, demonstrating strong market validation.

What truly sets Minikai apart is their vision to become the trust platform between regulators and care providers. By starting with on-the-ground workflow automation, they're building the foundation to become the system of record for all compliance activities.

Founders that hustle

The founding team combines deep technical expertise with personal connection to their mission:

• Keoki Alexander-Chang (CEO): Left a promising career leading Deloitte'sForensic AI lab to launch Minikai, motivated by his mother's struggles navigating health and human services. His experience gives him unique insights into both the technical and human aspects of the problem.
• Kyel Shera-Jones (CTO): Brings a powerful personal connection through his nephew Chase, an NDIS participant. Combined with his experience modernising complex backend infrastructure for the Australian government and leading high-performance teams at Concentrix-Tigerspike, he bridges technical expertise with deep domain understanding.
• Freddie Hedegaard (CGO): Former CEO of Dungbeetle.io, bringing extensive sales expertise to drive Minikai's growth and market penetration.

What impressed us most was the team's combination of technical sophistication and genuine mission-driven approach. They've transformed personal experiences with the care system into a solution that addresses critical industry pain points.

A compelling business model

Minikai has demonstrated strong early traction, having already secured major care providers who collectively support over 150,000 vulnerable Australians annually. Their platform offers clear value proposition by:

• Reducing administrative time by 30-50%
• Accelerating application processing and approval times
• Improving compliance accuracy and documentation quality
• Enabling more time for direct patient care
• Transforming hours of work into seconds through AI automation

Their revenue model scales with the number of patients being managed, providing natural expansion opportunities as customers grow. The platform's ability to handle complex regulatory requirements while improving efficiency creates strong customer stickiness.

Global appeal

Minikai's solution addresses a universal challenge in healthcare and social services. While starting with a strong foundation in Australia's NDIS and aged care sectors, the platform's capabilities are readily applicable to similar regulatory environments globally. The administrative burden in healthcare and social services is a worldwide challenge, presenting significant opportunities for international expansion.

Their AI-first approach to automation and compliance positions them well for scaling across different regulatory frameworks and jurisdictions. By building a solid foundation in Australia's complex regulatory environment, they're developing capabilities that will translate effectively to other markets.

The Seed phase and beyond

The funding round will primarily support:

• Expanding the technical team to enhance the platform's AI capabilities
• Building out sales and customer success functions to support rapid growth
• Accelerating development of their regulatory trust platform features
• Supporting international expansion plans

The founders have a clear vision for growth beyond their initial market, with plans to expand their platform's capabilities and geographical reach. With their deep technical expertise in AI, strong early traction, and clear product differentiation, we believe they're well-positioned to build a category-defining company in the care sector.

If you’re a visionary founder ready to make waves, please reach out via our website.

Flagship’s retail tech platform is poised to become integral to retail operations, driving data-driven insights and ushering in transformative changes across all retail establishments. This evolution has the potential to reshape the way retailers conduct business, empowering them to encapsulate their expertise within an embedded knowledge system.

The Tidal team led Flagship’s Seed round, and we’re excited to share our investment notes with you below. Our investment strategy encompasses diverse markets, models, and products, guided by a set of core principles fundamental to our decision-making process. If you’d like to explore the key pillars that define an exceptional Tidal Seed investment, you can learn more about how we invest here.

Markets with tailwinds

Simply put, retail is a massive market—with a staggering global expenditure of US$28 trillion in 2022. For those who can see beyond the challenges of a discouraging macroeconomic landscape, the post-COVID retail trends offer intriguing opportunities to identify emerging tailwinds. Trends like:

• Shoppers remain strongly inclined towards traditional brick-and-mortar stores, with a whopping 85% of global retail sales happening physically in-store.
• Interestingly, pure-play e-commerce brands are venturing into the world of physical retail. They recognise that in-person shopping experiences offer a unique dimension that their online counterparts can’t replicate.
• The concept of omnichannel retail has shifted from a nice-to-have luxury to an absolute necessity for any brand aspiring to thrive in today’s market.

As elucidated by Shopify:

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Retailers are using stores to deepen the consumer connection with the brand. In a crowded social and e-commerce space, stores can drive engagement and loyalty.

Tidal has been steadfast in our conviction regarding the e-commerce theme for quite some time now. We have demonstrated our commitment through investments in innovative companies like Shippit, Search.io, Carted, and Drive Yello. We haven’t yet seen a proposition around critical technology infrastructure that truly enables omnichannel retailers to reach the same level of sophistication in-store as they have online.

Products that change the game

Over the past six months, our close collaboration with the Flagship team has given us a profound insight into the incredible potential to transform retail operations management. It’s evident that retailers are eager to unify their segmented business units, bridging the gap between online and offline realms to create a cohesive operating system. Flagship envisions a future where they solve this—with the workflows and metrics of diverse departments, such as Buyers, Planners, E-commerce, In-store Visual Merchandising, and Marketing, seamlessly integrated.

Operational efficiencies often start and end with better data, and retail isn’t any different. Flagship’s leading product is a visual merchandising tool for retailers that provides unique primary data insights around granular store-based revenue performance. It enables retailers to centrally and digitally manage the roll-out, track the compliance, and get performance insights into their visual merchandising guides.

We firmly believe that better data and improved workflows can enable retailers to harness their experience and knowledge, convert it into embedded expertise, and subsequently codify their intellectual property for iterative improvements.

Founders that hustle

Flagship’s founder, Simon Molnar, brings a wealth of retail experience to the table. He served as CEO at Ice Jewellery and held various roles at Afterpay, giving him a dual perspective as both retailer and retail technologist. Simon is deeply customer-focused, collaborating closely with retailers to ensure that the product genuinely addresses their challenges and delivers tangible value. His unique background fuels his passion for helping retailers expertly position their products, optimise sales, minimise waste, and drive business growth.

Simon has meticulously assembled an exceptional team of individuals who have achieved remarkable success at renowned Australian tech giants such as Atlassian, Canva, and Afterpay and possess a profound understanding of the retail industry. This collaborative strength has enabled Flagship to successfully onboard some of Australia’s most prominent retail brands, including Venroy, LSKD, Aje Athletica, and SIR.

A compelling business model

Flagship’s mission is to become an integral component of retail operations, driving data-driven insights and facilitating transformations across diverse business units. They aim to supercharge mid-sized retail groups that are currently burdened by manual processes—significantly impacting their efficiency and effectiveness.

Flagship’s inaugural visual merchandising product drives a wedge in retail operations by creating primary data insights on store performance that have not existed before. From there, they can offer insights and workflows into the broader retail operation, capturing additional wallet share. With a huge market to target, a product that adds a lot of value, and a cross-section of teams and functions to serve within retail ops—Flagship has the makings of a seamless land and expand SaaS business model with a hybrid product-led-sales strategy.

The Seed phase and beyond

Flagship is currently in its Seed Phase and has already shown strong product-market fit, successfully onboarding industry-leading retailers, including Venroy, LSKD, Aje Athletica, and SIR. These partnerships have positioned them for the next phase of growth on the global stage, with the allocated funds primarily fuelling the development of an exceptional team to enable them to bring their visionary products to life.

From day one, Simon’s unwavering focus has been on establishing Flagship as the backbone of retail operations not only in Australia but also on a global scale, and we wholeheartedly support this mission. We look forward to continuing to support the Flagship team as they set out to transform how retail operations are managed.

If you’re a visionary founder ready to make waves, please reach out via our website.

Six months after our investment into Fair Supply, I’m reflecting on why we invested in this incredibly mission-driven company and how the business has continued to exceed our expectations. In early November 2022, I picked up a call from friend and fellow investor Jackie Vullinghs:

I’ve got one for you. It’s complicated to explain, but our diligence confirms that there isn’t anything like it globally.

After an introductory call with the founders, I dropped everything to get this investment through diligence and in front of our investment committee. Why? The potential of the core technology is enormous, and the founders, Kim and Arne, were nothing short of exceptional. I often tell people that while Tidal’s due diligence process is thorough (and can take a while), I always know in my bones when I’m talking to a Tidal company—and this was one of those situations. The synergy was also apparent for Fair Supply, who were excited about our unique early-stage product and operational expertise.

Businesses face mounting challenges when attempting to reduce ESG risk exposure

More so than ever, it’s clear that market tailwinds are the make or break of a great investment. It’s a combination of the right place, the right time, and of course, the right product. You can spot companies continuing to outperform their targets, despite the current macro environment—and Fair Supply is one of these companies.

You might ask, what’s driving that growth?

For starters, Global legislation is being passed requiring private entities to identify and report on ESG risk beyond Tier 1 of the supply chain. This has now become an urgent priority for the world’s largest organisations. From Global Asset Managers to Fortune 500 companies, the “Chief Sustainability Officer” is morphing from a luxury to a must-have.

The need for better data and tooling in ESG is abundantly clear with existing methods largely falling short:

• For modern slavery, many companies rely heavily on the global slavery index, which only measures modern slavery risk by the prevalence of modern slavery in each country.
• To measure Scope 3 carbon emissions, companies have relied on a methodology of “Emissions Factors”, which is fraught with issues—even going as far as to suggest it may be a gross generalisation that doesn’t reduce emissions at all.
• More recently, incumbents and startups alike have been creating makeshift solutions. They’ve been using a combination of existing datasets and enriching them with primary data to develop automated benchmark reporting tools in an attempt to align with emerging global reporting standards. We believe this system is flawed; most of these players are ‘marking their own homework’ where they’re creating a benchmark and then marking themselves against it.

The leading product in this category will be grounded in deep supply chain data expertise

I remember the overwhelming ‘aha’ moment when we truly understood the product’s uniqueness and potential. ESG risk is hidden deep within supply chains, and visibility into them has been overwhelmingly unavailable to date. Fair Supply co-founder, Arne, spent the last 15 years understanding and solving the data challenges of building global economic supply chain databases. He leveraged this expertise to create Fair Supply, a product that:

• Extends an academic methodology into a commercial proposition for company-specific supply chain analysis, and
• Extends into a System of Action by aligning with reporting guidelines.

Fair Supply is a SaaS platform that provides objective data and insights to help companies understand and manage their exposure to ESG risks across their supply chain. The platform combines proprietary algorithms with data from public sources to help companies map out their exposure to risks (including Modern Slavery, Carbon Emissions, and Biodiversity) and can provide visibility 10+ layers deep into the supply chain.

And that’s just the first act—our thesis indicates that Fair Supply has the best competitive advantage to create an industry standard and market-leading product globally. It’s set to become the indispensable SaaS tool that ESG procurement and investment professionals use as an integral part of their everyday business practices. Their mission is to abolish modern slavery, and they have a product that could actually make it happen.

Execution during the investment process mirrors execution in the first 12 months post-investment

Time and time again, we’ve seen the skills and expertise displayed during the investment process mirror that seen in the first 12 months post-investment. The signs we look for include:

• When you meet a founder that can push a clean fundraising process from end to end and build the investors’ conviction when sharing each new piece of information.
• Objections and concerns are quickly resolved with accurate data and thoughtful responses.
• No stone is unturned, and in the process, a strong working partnership is established between all parties.
• During the time it takes to complete the deal, there’s an open forum, whether a WhatsApp thread, a daily phone call, or on Slack, where insights are shared, and signs of deal progress are displayed.

The speed and pragmatism with which Arne and Kim execute are second to none. Before the money hit the bank, they had already attracted top-tier product and go-to-market leads into the business. Kim has always said that to be the best, they needed to surround themselves with the best. Other traits we tend to find in our best founders: humility and the ability to drive swiftly toward an outcome. These founders get on a plane, champion their cause, rally their troops around them, manage their stakeholders, push their people to be the best, and never take their eye off the ball. It’s infectious and what early-stage company building is all about. That’s a Tidal company.

We were delighted to have taken part in Fair Supply’s round alongside Airtree, Minderoo Foundation, and QIC. And since then, we’ve been excited by every step forward the team at Fair Supply has made.

We invest across a range of markets, models and products. We live and die by core principles in our investment decisions. For more information on the pillars that make a great Tidal Seed investment, see how we invest here. If you’re a visionary founder ready to make waves, please reach out via our website.

Since 2016, we’ve demonstrated an unwavering commitment to partnering with seed-phase founders and bringing their world-changing ideas to life. This dedication has led us to activate our third Seed Fund with the same passion for investing in determined, insightful founders with the tenacity to scale and grit to persevere. We look for game-changers developing innovative and disruptive products, addressing universal problems with global appeal in markets with strong tailwinds, and are backed by clear and demonstrable business models.

For those considering Tidal as their lead investor, we thought we’d proactively answer some questions you may have about how we think about investment.

What does an ideal Tidal Ventures investment look like?

A Tidal Company has the following traits:

• A founding team made up of domain experts that exhibit solid product-building fundamentals.
• A global addressable market that’s ripe for disruption.
• Founders that have cracked a novel way to address customers’ needs and win the market.

Whilst we obsess over differentiated products, we are in the business of building companies, not tools. At the point where we invest, the business model validation is still early, but it shows signs of lucrative economics over time. We are ready to lead your $1-3 million seed funding round and work with you and your team to create a sustainable advantage and pave the path to success.

What phase does Tidal Ventures invest in?

We specialise in seed-phase investing, often serving as a company’s first institutional investor. Typically when we invest, the founder has an early version of their product in the market, and they are exploring early customer acquisition tactics to secure paying customers. We work alongside founders to build their companies and use our lived experiences to avoid common pitfalls and solve problems. Our track record shows success in taking companies from seed to scale and beyond, and we hold reserves to double down on a vision in future rounds.

Is it too early or late to approach Tidal Ventures for investment?

We encourage founders to reach out to us regardless of where their company is on the journey—but the ideal time to start the conversation is when you decide to start your company. We’re product builders by nature and thrive on early product conversations.

How many investments will Tidal Ventures make in their Seed III fund?

Rather than spreading our investments thin, we choose to focus on a select number of new investments each year. Over the next three years, we’ll focus on 20-25 investments, making each investment significant for Tidal and the founder. This approach allows us to dedicate our resources and attention to nurturing each investment and providing comprehensive support to help our founders succeed.

What is Tidal Ventures’ macro outlook?

As we see it in our daily lives at work and home, technology continues to accelerate and evolve. It’s broad, complex, and investable across the early, growth, late, and public market stages. We’re not alone in our prediction that technology will be the leading global focus for growth at scale and will create the type of jobs that will advance people and their economies. We’re currently living in yet another technology cycle that is having an outsized impact on our world. 75% of all computing is still on-premise. Still, with the onset of AI, we’re already seeing global forward capital expenditure investment in data centre processing capacity starting to accelerate, with cloud spending predicted to be $592 billion by the end of 2023.

What is Tidal Ventures’ investment thesis?

Our investments will relate in some way to the following three broad areas that reflect our investment thesis:

• Focal Points: We’re looking for technologies and people that can drive scalable optimisations, resulting in platforms that can dominate a sector.
• Cognitive Cloud: Over the next decade, every app will be a data-centric app (DaaS), with leaps being made in AI/ML that will fundamentally shift how work gets done. We are excited to invest in this transformative space.
• Inflection Aware: We go beyond themes by identifying emerging inflections that drive significant shifts in value chains within sectors. Our investments cluster around the inflections we believe will have an outsized chance of displacing existing practices, including the future of consumption (commerce, sustainability, agtech), the future of enterprise (cybersecurity, observability and insights, productivity automation), and the future of service delivery (smart logistics, API infra and dev tools, fintech, regtech).

How can Tidal Ventures help build my startup?

We might be product-obsessed, but we are here to build long-term sustainable companies that create value for founders and investors. Our team of experienced ex-founders and ex-operators offer tailored assistance with strategy, product, and resources, helping companies create sustainable advantages. Unlike traditional investors, we act as a “brains trust” for our founders, providing direct operational support. We are passionate about building companies and guiding our portfolio companies through their critical firsts. When we extend a term sheet to a founder, we effectively offer ourselves a part-time job, a testament to the depth of our conviction and belief in the company’s potential. Our expertise supports our steadfast commitment to delivering outstanding results.

What impact can Tidal have on my product strategy?

We help portfolio companies unlock their product’s potential by providing expertise in product-market fit, product-led growth, and go-to-market strategies. Our focus is on creating bold and courageous product-led businesses that are viable, marketable, and profitable. We invest our resources where we can add the most value and work closely with our founders to build momentum and create game-changing products. We aim to foster organisations with mission-critical products that customers can’t live without.

What sort of advisory network does Tidal have access to?

Tidal connects portfolio companies with a network of proven technology founders and executives who have scaled some of the world’s top tech businesses. This expert network helps portfolio companies tackle significant challenges by providing valuable expertise and guidance from a team of C-suite executives, mentors, advisors, board directors, investors, and thought leaders. Tidal also offers portfolio companies access to vetted specialists who can help their businesses thrive. This is especially useful for seed-phase founders who often do the job of an entire C-suite for the first time.

How will Tidal back me in future fundraising rounds?

Tidal has two complementary funds investing in the best companies from seed to growth. This provides stability and consistency for our portfolio companies and delivers excellent returns for our investors. In addition to doubling down on existing investments, Tidal’s follow-on fund is used to invest in larger companies it missed out on backing at an earlier stage. Approximately 60% of our fund is allocated for first-time investments, while 40% is for follow-on investments. Tidal is a long-term partner with the capacity to invest more in later rounds, meaning we can continue to support our portfolio companies as they grow.

How do I get funded by Tidal?

We are open and actively investing in our next generation of founders. Here are some tips for getting in front of our team:

• Warm introductions are great but not essential. Find the team member you want to talk to and send us a summary of your idea.
• Let us know what your product does (or will do) for customers, steering clear of any buzzwords and tell us why now is the best time to build this.
• Be clear and confident. We’re interested in who you are as a founder, the strength of your product story, your ambitions and vision, the gaps, the opportunities, and why you think you’ve got an idea that can make waves.
• Make sure you check us out, too. Accepting investment is a big deal and a multi-year commitment. We can connect you with our founders to learn first-hand what it’s like having us in your corner.

The time is now. Get in touch with us if the above resonates with you and you want to join our growing family of Tidal Companies.

Blakthumb is a software company that provides an intuitive end-to-end operating system for cultivators and producers of cannabis and food. Their mission is to build resilient communities through the power of decentralised production.

The Tidal team recently led Blakthumb's pre-seed round, and we're publishing our investment notes below. We invest across a range of markets, models, and products. There are core principles that we live and die by in our investment decisions. For more information on the pillars that make a great Tidal Seed Investment, see how we invest here.

Markets with Tailwinds

An underserved market.

For the past decade, technology built for the Indoor Agriculture market has focused on (1) environmental control and (2) compliance. As a result, almost all the technology advancements have been made in hardware systems (including vertical racking, nutrient mixes and LED lights), compliance software, and sensor technologies, with highly fragmented distribution.

The operational side of growing plants (management of people & processes) has been almost entirely ignored. However, with hardware costs coming down and market tailwinds pushing consumer demand, the Indoor Ag market is starting to mature.

We believe cultivators will need a competitive advantage in operational efficiency, quality management and high performing teams in order to thrive and scale.

The timing is now.

In 2021, the cannabis and indoor food production market generated $201.9 billion in revenue and it's growing rapidly at a CAGR of 17.6%. The North American cannabis market is exploding as the world begins to recognise the medicinal benefits of the plant. The indoor food industry is benefiting from the cannabis flow-on effects, as capex decreases and consumer preferences, food security issues and supply chain pressure pushes the world toward more sustainable food production methods.

The market tailwinds are in place and the infrastructure requirements are now increasingly cost effective and easily accessible. With Blakthumb's operating system, cultivators will have the final piece of the puzzle to enable them to start, optimise and scale their growing operations. Blakthumb will become the market enabler and unlock this growth.

Products that Change the Game

There is a burning need for beautiful software in this market.

Planning for production is typically done on a spreadsheet, and task management is on a whiteboard or in a Team Leader's head. None of these methods are sustainable or scalable operationally, and the approach is prone to human error, which runs the risk of something catastrophic happening. Team Leaders worry about this constantly, and can lead to burnout or resignation.

Cannabis cultivation is a nascent industry that lacks experience. The result is an industry with a high turnover rate - between 40-60% of people leave within the first two months - and the two major reasons why people leave are lack of recognition and lack of job structure. This is costing the US cannabis industry at least $1 billion each year.

A vertical SaaS product with a System for Action.

Software tends to be built for business owners who want data rather than teams who need to take action. Teams end up dealing with multiple legacy systems that don't actually help them do their jobs and show their work. Production teams don't need another system of record, they need a system for action. The data they create provides the insights and predictions they need to take smarter actions.

Blakthumb brings order to the chaos by providing Team Leaders with an automated, digital tool to replace their static tools. At its core, the product provides visibility over the cultivators end-to-end production environment. Blakthumb manages the complexity of production issues and delays, both quickly and with assurance. Blakthumb captures data across all areas of production to deliver precise strain performance insights and make it easy to plan and delegate tasks effectively.

Founders that Hustle

The winning product will be built by experts who care deeply about the customer.

Software can't be built for cannabis and food production without deep domain expertise. The industry is complex with specific terminology, processes, and exceptions to the rules - and to win here, you need credibility. Mel and Carey are the team to build the best product for this market. They have been producers themselves, they have researched the market extensively and they have done deep dive user research to hit on the right value proposition.

This founding team are some of the most determined we have seen in years. They have been seeking the right business model for this market for 6 years with minimal outside capital. This is their life’s work and we at Tidal feel privileged to be backing them with early Seed capital to kick start their plans to change this world.

If you're a visionary founder who is ready to make waves, please reach out via our website.

Checkbox is a no code platform that enables non-technical business experts to build automated solutions that replace the manual tasks that bog down their day.

Checkbox combines forms automation, decisioning support, document automation, and workflow automation in a single platform to enable complete end-to-end Expert Process Automation (”EPA”) with a seamless end-user experience. EPA enables an organization to capitalize on the knowledge of its experts and build that into technology created by none other than those experts themselves. The automation of expert workflows is crucial to driving productivity gains within enterprises as no matter how repetitive and mundane the task, an expert’s knowledge is always required, drawing them away from the highest value-adding activities.

The team at Tidal tracked the business for nearly six months before the founders, Evan Wong and James Han, made the decision to raise a pre-Series A round with Tidal and Sequoia India's Surge. We spent that period white-boarding with Evan and James during monthly workshops that covered GTM, customer segmentation, and Series A tactics. We've been very impressed with the founders' responsiveness to advice, speed of execution, and ability to set and meet their forecasts.

Markets with Tailwinds

A crucial part of any investment process at Tidal is the ‘thesis development stage’. In fact, this often precedes an individual investment opportunity. As with most VCs, we want to invest behind markets with tailwinds. In other words, it’s important to get the timing right and to be able to answer the question “Why Now”.

A note on the No Code revolution

In the same way PCs democratized software usage, APIs democratized software connectivity and the cloud democratized the purchase and deployment of software. No Code will usher in the next wave of enterprise innovation by democratizing technical skillsets...this profound generational shift has the power to touch every software market and every user across the enterprise.
~ Techcrunch

We are in the midst of a No Code / Low Code movement, democratizing the ability to create software applications without the requirement to code. This removes internal bottlenecks caused by barriers to accessing IT and enables the business to address customer needs (through internal Dev & IT teams) without de-prioritizing internal productivity needs. The best part is that the creator of these internal automation tools is also the commercial expert, which has the benefit of producing the most relevant output as well as capturing a greater proportion of organizational IP within the tools themselves, therefore reducing the IP leakage that often comes with knowledge workers departing a company.

From RPA to EPA

Whilst often labelled as late adopters, enterprises have been turning to technology to drive efficiency gains for decades. In fact, it was estimated that enterprises spent USD 550 billion on custom software in 2021. The big shift we have seen in the past five years is towards automation. The first wave of enterprise automation is referred to as Robotic Process Automation (”RPA”), which automates individual tasks, removing them completely from the hands of humans. RPA saw a huge tailwind push during the pandemic, as companies sought to automate what was previously simplified by having people in the same office together. A leader in this space is UIPath, who were early to market in 2005 and IPO’d in 2021 as one of the largest US software IPOs in history (at that time, anyhow). Though it was the 12 months pre-pandemic when Gartner reported annual growth in RPA of sixty-three percent.

Next up was Business Process Automation, or BPA. This took RPA one step further by automating workflows and not just individual tasks. Human engagement was solicited through the process as and when required, but the workflow itself was overseen by the software. Technology is leveraged to perform a sequence of repetitive tasks where manual efforts are otherwise substituted. This market is estimated to reach $19.4 billion by 2026, up from $9.8 billion in 2020, growing at a CAGR of 12.2%.

And that brings us to Expert Process Automation, or EPA, what we believe is the next wave of the ‘no-code revolution’. EPA tackles problems that are higher up the value chain.

Unlike RPA, which is about replicating the exact actions a human user would take, EPA is about replicating the exact decisions and actions an expert would take.

Products that change the game

Enterprise teams need to automate manual work in order to drive much-needed productivity to remain competitive, but traditional software development software is typically not accessible or feasible (or incredibly expensive). Enterprises often turn to custom software to build out automation, which can address the specific needs of a business. However, each new solution has to play nice with legacy systems and processes and balance the competing interests of multiple internal teams, as well as be continually maintained over its lifespan. This doesn’t strike me as the most efficient option...

Enter Checkbox. Using drag and drop, expert knowledge workers can quickly and efficiently create and deploy software solutions that automate repeatable workflows. Internal IT resources are not required to unlock these new solutions (which can focus on the much higher value, customer-facing, needs) and the cost of Checkbox pales in comparison to leveraging third-party consultants.

We think Checkbox can be famous for enabling its users to quickly spin up a piece of software that automates some of their own workflows, striking that perfect balance between technical sophistication and ease of use.

This is game-changing for business users, who, without needing to code, can build an app that manages the information flow, decision making, and document generation required to automate their work. Checkbox's technology provides a full suite of enterprise-grade application development features on a single seamless interface, combined with rapid deployment, permission control, analytic dashboards, and integrations.

Founders that hustle

We first met Evan and James almost exactly one year ago — they are clear communicators, ambitious, capable, and very commercial. We witnessed firsthand their ability to articulate a vision for their business and consistently execute against it. We were most impressed with the strong ‘test and iterate’ culture they had cultivated and the speed and hustle with which they explored new growth levers. There were no excuses or delays when it came to testing out a new lever (on the GTM or product front), which enabled the team to make an informed decision around prioritization and value trade-offs.

A compelling business model

Checkbox is a SaaS business with attractive margins, excellent net revenue retention, and expanding ARR. Checkbox is well-positioned to engage in a dual-pronged GTM, with a genuine product-led growth engine complimenting enterprise sales efforts, especially as its reach expands through Tier 1 global partnerships.

We see strong potential for revenues to 'land and expand', with Checkbox generating incremental revenue the more apps their customers build (and the more value their customers derive from the platform). Checkbox has an existing blue-chip enterprise customer base (e.g. Coca-Cola, Telstra), largely landed through the legal department, with evidence of expansion across functions to People & Culture, Procurement, Finance, Risk, and IT. In addition to inter-company expansion (by department or function), Checkbox has already proven its ability to compete in the US having secured its first six-figure US customer in 2021.

The Seed Phase and beyond

Checkbox firmly checks the boxes (pun intended ;) for nearly all Seed Phase proof points despite having never raised a formal Seed round. We see this with companies, such as Checkbox, that demonstrate a strong product-market-fit from Day 1 and accelerate through the initial growth phase. Off the back of strong global momentum, the founders made the decision to raise a pre-Series A round that will position the company to tap into international markets for their next round of capital.

For a refresher on how we view the Seed Phase, please read our blog on this topic. The company has a product that customers love, a repeatable GTM strategy, a clear land product, and well-understood metrics. Leading up to the round, the company had proven its ability to compete with global incumbents and secure international customers. We see a huge opportunity ahead, especially as the team leverages global distribution partners, to further tap into international markets from both a customer acquisition and investment perspective.

We look forward to supporting Evan, James, and the Checkbox team as they continue to help business users automate their work, and grow Checkbox into international markets.

If you're a visionary founder who is ready to make waves, please reach out via our website.

Get to know Tidal's Georgie Turner

What gets you excited about Seed phase?

It's the most challenging part and therefore the most rewarding. When a founder has experienced a problem and describes a clear vision of how technology can solve that problem, that optimistic feeling is infectious. Being involved at Seed means I get to experience the beginning of a serendipitous journey.

But the Seed phase is also the most difficult part to crack. Founders need to reach product market fit, find a scalable path to market and convince early team members and investors to take a chance on their vision. It can be tough and tiring, but it's never boring.

You also bring an operator lens to the team, how has that experience shaped you as an investor today?

In 2012 I was part of the early team at Rackspace Australia, selling the early version of cloud computing infrastructure into Australian corporates and startups. This was around the time that AWS launched in Australia, so I had direct experience selling in a fast growing market with some tight competition on every deal.

During that time I was deep in the weeds of our local go-to-market strategy, including digital and brand marketing, product localisation, partner and channel selling, direct enterprise and SMB selling and what we called 'fanatical customer support'. Through that time I gained a great appreciation for the challenges around unlocking rapid growth and how to accelerate in a new market. Rackspace had a strong sales and support culture and took its values extremely seriously, a quality that I actively look for in a founder when I invest.

What's something you wish you could go back to tell your less experienced self?

Figure out what makes you happy and then just optimise for that. Don't compare yourself to other people. When you tell the stories of your accomplishments, the things that you will remember the most will be (1) the way you felt and (2) the people you were with. Surround yourself with people that are smarter than you.

Is there a type of technology that you don't use?

I have never really been a user of social media, it's not a tool that appeals to me at all. Despite being a technology investor I actually don't use a lot of technology outside of the standard tech for work. I still use my iPhone for making traditional phone calls more so than anything else.

What is your niche, your passion outside of work?

I am an avid reader and I devour fictional stories like other people binge-watch netflix. Pre-covid I would go to the library and take out 5 books every 4 weeks. Post-covid I use a Kindle but I still miss the real thing. The last book I read was Klara and the Sun by Kazuo Ishiguro. It is centred around an "artificial friend" to a lonely child and is narrated by the machine - Klara. I have always been more interested in fiction as a commentary on human nature than autobiographies or business books.

How do you think the world would change in 10 years?

When my baby was born last year on Christmas Eve, it occurred to me that 'Gen Alpha' may be one of the last to be conceived and born with no optional genetic editing offered to the parents as standard medical practice. The field of genetics has great implications for innovation in the preventative health market, which I believe will come to dominate the healthcare space in the next 10 years.

If you're a visionary founder who is ready to make waves, please reach out via our website.

Operata is a performance monitoring and assurance solution for organisations using contact-centre-as-a-service (CCaaS) technology. It draws on a range of data sources to pinpoint call quality issues and speed up the path to problem resolution.

The Tidal team recently made an investment into Operata, and we're publishing our investment notes below. We invest across a range of markets, models and products. There are core principles that we live and die by in our investment decisions. For more information on the pillars that make a great Tidal Seed Investment, see how we invest here.

Markets with tailwinds

The economic efficiencies around shared services are a no-brainer, so the as-a-service movement has extended to contact centres. Even though only 10% of organisations have migrated from legacy on-premise solutions to the contact-centre-as-a-service (CCaaS) model, the market size is already US$24BN. The market is well-established, but still forecast to grow at a 26% CAGR, with the remote-work movement accelerating this trend.

The organisations that made this move prior to the COVID-19 outbreak were well positioned for their agents to work from home. Those that didn't have been rushing to stand up a remote contact centre for the past twelve months. With the likes of NICE InContact, AWS Connect and Genesys taking the bulk of market share, a distribution platform for supporting products is emerging.

Voice technology is rapidly improving, but the quality of speech and voice is more critical than ever. Voice quality directly impacts customer satisfaction, handling times (and therefore costs) for the organisation and even agent mental health. Voice is also no longer just a human to human channel. Bots, assistants, NLP and biometrics are all reliant on voice quality for performance, further complicating the voice infrastructure stack.

A complex infrastructure stack creates a product opportunity

Whilst the CCaaS offerings in the market are designed as simple tools, the implementation of a CCaaS system is both complex and mission-critical. To stand up a contact centre requires proven performance - scalability, quality, and accuracy all need to be tested and evidenced to make a transition. Data resides in silos throughout the org and it's hard to surface issues in the CCaaS setup without observability - performance issues can be attributed not only to the CCaaS provider, but to the supporting third-party services and often to the agents themselves.

Today, businesses have few options but to manually test the technical and functional requirements of their various contact centre systems, requiring testers to call their business phone systems and engage in web chat or other outreach channels to identify defects, disruptions, or disconnections in their experiences. The tools used to monitor performance today in modern cloud communications are ineffective at measuring customer experience quality and providing the level of detail needed to focus improvement and optimise performance.

Products that change the game

Operata provides performance monitoring and experience management for CCaaS. The product observes and reports on the factors impacting call quality, from a network outage to an agent headset issue. This enables two things:

1. get CCaaS environments stood up quickly with minimal risk and
2. ensure optimal ongoing voice quality for agents and customers.

The product demonstrates an obvious and real-time ROI to the organisation, because fewer issues and better call quality means service agents can spend their time resolving customer issues.

The 'hook' for the customer is the ability for service delivery and IT Operations managers to uncover correlated quality insights on contact centre performance (ie. actually identifying the source of the performance issue rather than the mere existence of one). These users live in the tool day by day and rely on it to help uncover performance issues in real time.

Our thesis: If Operata can bring observability and test/iterate capabilities into the CCaaS ecosystem, it will become a critical part of the reference architecture required for efficient and low-risk CCaaS adoption. Over time, this product could become famous for providing 'speech-services-as-code' for multi-vendor communications services.

Founders that hustle

Co-founders Andy (COO) and John (CTO) have been in the voice service delivery and performance management space for 40+ years between them. They understand the complexity of this customer problem in all of its excruciating detail. Teamed up with experienced founder-operator Romilly Blackburn (Whispir & Smooch.io), this group of co-founders have what it takes to build a world-class solution for this problem - and grow into a critical platform company for modern cloud communications infrastructure.

A compelling business model

With an established distribution ecosystem of CCaaS and ISV's and a low-friction product that plugs straight into the agents' softphone via a Chrome browser, Operata is well positioned to achieve product-led growth. Because the use of Operata de-risks the move from on-premise to cloud, the product is an enabler to the adoption of CCaaS. This means that Operata not only aligns itself with this high growth market, but becomes a growth accelerator for its CCaaS partners as they pioneer the migration to the cloud.

The seed phase

Andy, John and Romilly have assembled an excellent team of engineers that have built an enterprise-grade product with minimal external funding. Near term, the product will evolve to integrate across additional CCaaS providers, and become even more sophisticated within the internal service desk ecosystem. There are already a number of organisations in Australia, NZ, the UK and the US that are using Operata on a daily basis to monitor call quality and resolve issues. The next step is to create a repeatable go-to-market engine through both partners and a sophisticated growth marketing function that interfaces closely with the product team.

A note on the observability thematic

Tidal has been monitoring the observability thematic for some time, and this investment follows our recent investment in TheLoops. Observability is a measure of how well internal states of a system can be inferred from knowledge of its external outputs. As cloud architecture and the software technology stack becomes increasingly distributed, there is a need for observability (rather than merely monitoring) to provide granular, system-level insights and context to specific parts of the organisation.

Operata is bringing observability to cloud-based call centres, helping call centre agents and operations personnel to improve their understanding of the environment, and in turn, vastly improve their customer experience. We look forward to supporting the Operata founders and team as they take Operata to the next level.

If you're a visionary founder who is ready to make waves, please reach out via our website.