Thought waves on seed venture

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.

Renewtrak is a platform for lifting the conversion rate of renewals for technology providers. It digitally automates the end-to-end logistics of renewals from quote to payment, including sales, pricing, billing, and commission constructs.

The Tidal team recently made an investment into Renewtrak, 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 market for technology is enormous - there is US$5.2T (yes, trillion) in global indirect technology spend per year. It is also growing rapidly. As technology investors, we have deep conviction that technology will continue to 'eat the world' and take a larger share of organisational spend globally.

Renewals are a significant component of this revenue pool, estimated at US$260B per year, across ~3,500 software and hardware vendors and ~140,000 channel partners and resellers globally. This revenue pool is expected to rapidly accelerate, as technology businesses continue to transition away from one-time sales, towards annualised recurring 'as-a-service' business models, which are highly valued for their predictability and customer loyalty.

Recurring renewal revenues

While renewals from existing customers are critical to margins, profitability, and customer retention, they are poorly served.

Hardware and software vendors can expect to lose between 15-50% of their renewal opportunities because the end customer is not even aware their product or service is due for renewal

Renewals often do not receive the same degree of organisational focus, talent, and resources as new sales, and renewal processes are plagued by manual processes, legacy technology, disparate and low-quality data, complex pricing structures, and poor transactional experiences. The intermediated relationships between technology vendors (OEM's), resellers (channel partners), and end customers make this challenge even more acute, creating a lack of ownership and responsibility for the renewal experience.

Products that change the game

Enter Renewtrak - a workflow automation solution for renewal transactions, with a vision to help the global technology industry to move towards a subscription revenue model. Renewtrak's platform does the heavy lifting of ingesting and consolidating data across the vendor, channel partner, and customer, and managing the renewal process from end to end. The product digitally automates the logistics of renewals from quote to payment, including sales, pricing, billing, and commission constructs.

For technology vendors and distributors, this is game-changing - driving additional recurring revenues by quoting and converting more renewal opportunities, reducing the time and expense involved in renewals, adding organisational control and oversight of transactions, and deepening customer relationships through improved data and payments experiences.

A team that hustles

The Renewtrak team has a strong pedigree in financial services, with payments and workflow simplification embedded in their DNA. The team is led by CEO Mathew Cagney, supported by CTO Andrew Duckworth, CPO Alex Wood, and CCO Paul Dunn, and with active involvement from Chairman Michael Twaits. We have engaged closely with the leadership team closely over the past 12 months as they have driven Renewtrak towards the strong position it is in today, and we are confident that they are fully equipped to scale.

A compelling business model

Renewtrak is focused on accessing a vendor's 'renewals under management' (RUM) to quote and automate. Renewtrak earns subscription revenues for consolidating the customer data and managing the renewals workflows, and consumption revenues through fees applied for success in improving customers' renewal conversion rates.

The model provides for a strong 'land and expand' story. For a given vendor, the RUM accessible to Renewtrak depends on the geography, product type, renewal channel, and value of the renewal. If Renewtrak can demonstrate value by improving renewals revenues, vendors may then choose to apply Renewtrak to additional pools of RUM by expanding product use across more geographies, product types, and renewal thresholds. By connecting both vendors and distributors to customers, there is also the potential for vendors to roll out Renewtrak across additional distributor relationships, and for distributors to recommend Renewtrak to their broader stable of vendors.

Our thesis: Renewtrak has the potential to enjoy powerful network effects by demonstrating value through its core renewals product, then enabling core services to be offered through its 'platform' connecting vendors, distributors and customers, and then opening up that platform to third-party service providers across the technology category, creating an ecosystem.

The Seed Phase

The team at Renewtrak is squarely in its Seed Phase. They have built a powerful platform for renewals automation, landed major technology customers including HP, Lenovo, VMWare, and rolled out the product in over 40 countries. Near-term, the focus is on demonstrating continuing improvement in customers' renewal conversion rates while accessing a growing pool of RUM from customers as the platform is rolled out across additional geographies, product lines, and renewal thresholds.

A note on the workflow automation thematic

Tidal is actively investing behind businesses that help automate important organisational workflows, spanning customer engagement (Upflowy), and transactional processes (FrankieOne) to date. With technology driving continued improvements in customer experience, businesses are being challenged to leverage automation technology to improve workforce productivity, data and analytics capabilities, customer engagement processes, and payments offerings. This can unlock more personalised and better supported product offerings, and deeper customer relationships. Renewtrak is one of many tools we see emerging in this space.

We look forward to continuing to support the Renewtrak team as they build out the product, grow the team, and support their customers to generate more recurring revenues. If you're a visionary founder who is ready to make waves, please reach out via our website.

Thanks to Max Kausman and Evelyn Zhang for help in drafting this post.

FrankieOne provides customers with a single API to better manage KYC/AML and Fraud. Its integrated platform delivers a unified view of end customers and unlocks data-led decision-making and workflow automation for compliance, operations, audit, and risk.

FrankieOne (or just "Frankie") recently announced a A$20 million Series A round co-led by US VC fund Greycroft and Sydney-based Airtree Ventures, with participation from Harry Stebbing's 20VC in the UK, Reinventure, Mantis Ventures in the US, high profile executives from global Fintechs such as Robinhood and Public, and follow-on investment from Tidal and other existing investors. This brings the company's total funding to just under $23 million.

Frankie's announcement comes one week after one of its competitors, Alloy, announced a US$100 million Series C round at a whopping US$1.35 billion valuation, suggesting this is a hot sector to be backing right now. But what did we know at the time we invested in the Early Seed round two-and-a half years ago? Let's take a look at how our investment thesis from May 2019 has stood up against the world we know today.

Markets with tailwinds

FrankieOne capitalizes on a data integration & orchestration opportunity within the financial services sector. Existing point solutions are often decentralized, requiring multiple integrations (and in some cases, they completely fail to integrate with legacy systems), and provide poor visibility of the customer to financial service providers....and a broken user experience to boot.

And yet, KYC ("Know Your Customer"), AML ("Anti-Money Laundering") and Fraud prevention solutions are mission critical when onboarding new customers and monitoring BAU transactions. The cost of not having adequate tooling and protection can be hugely material to a financial services provider in terms of cyber fraud, as well as revenue left on the table.

We have seen this act play out in a material way in the consumer services sector when Twilio (and similar service providers) saw adoption at scale to provide non-core capabilities to customer tech stacks.

Our thesis: With the build out of open banking and digitally native financial services companies, there is a huge opportunity for the emergence of an automated aggregator for critical services that feed into these banking stacks. The first wave of this is KYC, AML, Identity Verification and Transaction Monitoring.

Products that change the game

Frankie connects compliance and risk data sources to a single API that unifies how its customer base (which includes the likes of Westpac, AfterPay, crypto exchanges, utility companies, wealth management platforms, lending institutions etc.) onboard and monitor their customers, meeting global regulatory requirements.

Frankie's product currency (how it is directly attributable to a measurable outcome for its customer) is two-fold:

(1) A higher "pass-through rate" (the % of new customers that are verified & approved for onboarding) that it delivers by leveraging hundreds of data sources and utilizing its intelligent decision engine to solve for missing information across multiple sources → this increases revenue for the customer and saves the cost and complexity that accompanies manual intervention.

(2) A unified view of consumers at the end customer level (not by product, for example), delivering a better onboarding experience to consumers and a more secure means of ongoing monitoring → this improves consumer satisfaction & retention, and eliminates the multi-step process currently undertaken to stitch together a holistic view of an end customer (e.g. the customers of a bank).

Founders that hustle

Two key attributes we look for in founders are (1) whether they have a unique insight or experience with the problem space they’re trying to solve, and (2) whether they employ a data-driven approach to building a business (how they assess the market opportunity, acquire customers and establish a test & iteration culture).

On the first point, co-founders Simon Costello and Aaron Chipper were FrankieOne’s first customers. Let me explain this circular reference — Simon’s journey with Frankie began with him building the foundations of a neobank (branded “Frankie”) for the Australian market in 2018.

It was during this process that Simon & Aaron experienced a lack of plug & play solution to conduct KYC and AML for new customers. Even when building a financial services company from the ground up — one that would not be encumbered by legacy systems (in comparison to a large Australian bank, for example) — they could not find a solution that delivered what they wanted. There were individual data sources to connect to, but doing so left revenue on the table and did not help deliver an amazing experience to the end customer (an absolute must for any new consumer product focused on Millenials). Simon even delved into the business banking sector only to realize the same applied to KYB (“Know Your Business”) — the industry was stiffened by legacy systems and manual processes (KYB is now a fast-growing component of FrankieOne's product suite).

This leads me to the second point. I believe it was back in 2016, while Simon was still at the helm of a fast-growing Fintech in SE Asia, that he flew to Sydney for a conference to begin his market research on the emerging Fintech landscape in Australia. Having previously lived in the UK, he'd seen the rise of digital challenger banks such as Monzo and I'll never forget Simon sending me the link to its crowdfunding page (I note Monzo is now valued north of A$2 billion!). When Simon moved back to Australia with his vision in mind, I watched him meticulously conduct market studies with carefully crafted user groups to identify exactly where the pain points persisted.

Simon's decision to pull the launch of Frankie, in exchange for the RegTech version of the business we know it to be today, was not one taken lightly — the legals had been finalized, the wireframes for the consumer app built and commitments secured for a large angel round...but it wasn't the multi-billion dollar global opportunity he saw with FrankieOne. Simon's ability to put pens down at the final hour was supported by his data-driven approach to decision making and only served to build even more confidence with investors in his execution capabilities when he came back to fundraise for FrankieOne.

We backed FrankieOne at the earliest stage of Seed, when it was pre-launch. We had huge conviction in the market but it’s fair to say we put our chips on Simon & Aaron, founders with a clear vision and the discipline to truly test the market and iterate.

Seed: landing a compelling business model and strong product-market-fit

Frankie's Seed Phase comprised two rounds — the first was pre-launch and the second was just as the company was going live with its first handful of customers.

One of Frankie's first tasks was determining the best pricing model for the business and its customers. Frankie went to market with a SaaS consumption model — customers are charged a SaaS fee that gives them access to Frankie's software in addition to a transaction fee charged for each API call (which equates to product usage, across any of: KYC, AML, KYB, IDV and new products to come). The transaction fee (or consumption-based component) cost per unit varies by product and the volume of usage.

In terms of achieving PMF, one of Frankie's most compelling attributes has been the inbound nature of its customer base. The team acquired its first +50 customers through inbound leads and referrals → a clear indication that people were proactively searching for a solution to a problem they were facing. In order to facilitate this flywheel, the company launched a website with crystal clear messaging around its core capabilities and the problem it solved. The team also focused on 'landing' with one product (e.g. KYC) as the likelihood that a customer would expand to another product (e.g. AML) was high once Frankie earned a customer's trust. This simplified GTM messaging reduced complexity in the sales pitch as well as made the decision-making process for the customer a lot more straightforward (vis-a-vis selling a suite of products upfront).

Series A: a scalable GTM model and a defensible moat

In order to build next-round investor confidence that Frankie was positioned for scale by the time it launched its Series A round, we workshopped a list of prioritized 'Series A proof points' to help focus resources & time. The team was exceptional at systematically ticking these off one by one over the 12 months that followed.

A big question thrown around during white boarding sessions was "how can Frankie get its customers up and running quicker". This was especially relevant for start-up and mid-market customer segments. Frankie released a Stripe-like widget enabling customers to create their own customized onboarding flows with only a couple lines of code, auto-populating personalized screens that would otherwise have taken weeks to build.

Frankie also focused on shortening the TTV ("time-to-value") for its customers by rolling out Smart UI onboarding screens for its end customers, which improved usability and resulted in a much timelier increase in the pass-through rate for Frankie's customer.

To overseas markets and beyond

To date, FrankieOne has focused its GTM efforts on Australia but this hasn't stopped it from generating > 40% of its revenue from international markets. For starters, some of Frankie's largest customers, acquired in Australia, have pulled the company into overseas markets in which they operate, based on the clear product currency delivered by Frankie on domestic soil. The company also landed Zipmex, a fast-growing cryptocurrency exchange based in Southeast Asia. Frankie has connected data sources in more than 46 countries (and counting), setting the stage for further global domination.

A big part of this next phase in the company's growth will be to proactively enter key geographical markets. One of the core differentiators between Frankie and its competitors around the globe stems from the conscious approach it took on Day One, to address a breadth of customer by vertical and size, ensuring compliance with the largest of banks down to the smallest of Fintech startups.

A note on the Fintech infrastructure thematic

The definition of a Financial Services Provider is evolving to include almost anyone as the demonstrated acceleration of embedded finance reshapes the financial services industry (noting embedded finance is projected to grow by 922% between 2020 and 2025). We talk about the non-core (but mission critical) element of KYC/AML and Fraud Monitoring across Frankie's existing customer base — the dynamic of this relationship only intensifies when you extend Frankie's applicability to any company with an embedded finance offering, where the core focus of the tech stack could be on travel or e-commerce, sitting well outside the realm of financial technology.

Payment services was the first to be embedded, though we have now seen the layering in of more complex capabilities (e.g. FX, lending and insurance) into the tech stacks of embedded finance providers alike.

Frankie becomes a required addition to the primary embedded financial service into the tech stack of non-financial products.

It is the growth of embedded finance up until today that has fueled the proliferation of Fintech giants like Stripe and Square and is poised to have a multiplier effect on the success of companies like FrankieOne.

We look forward to continuing to support the FrankieOne team. 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.

The Loops platform stitches data from diverse tools to help reps identify customer issues with contextual insights and recommend resolutions or actions.

The Tidal team recently made an investment into TheLoops, 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

For many companies the load on customer support has increased significantly due to a number of factors including a wider push to self-serve, reduction of bricks & mortar presence, number of contact channels (phone, email, chat, social etc), and more recently due to pandemic induced work from home conditions.

This acceleration of digital transformation strategies has led to increased volumes that overwhelm customer support operations. The current resolution methods lack the tools to give adequate signals to agents to understand the customer issue thus burning precious time to get to a resolution.

The Future of CX

Traditionally, support representatives have not been empowered to own the resolution process. But having an intelligent customer support strategy that bring context, collaboration and workflows by harnessing data across a range of systems reaps huge benefits such as increased sales conversions, decreased service costs, and improved customer satisfaction.

Companies recognise that leveraging automation and analytics is the best approach to reducing handle time thus securing the life-time value of their customers.

Products that change the game

TheLoops brings observability capabilities to front office teams and can truly provide a step change in the customer support experience by accelerating a collaborative path to ticket resolution. The product aspires to be:

A data and analytics learning engine with point-and-click integrations providing insights and collaborative process flows to improve the support team’s efficacy.

Support operations span multiple levels and often sit across support and product teams. However information silos exist where front office teams have not had the same instrumentation as product or engineering teams. This often results in increased handle-time, unnecessary escalations and decrease in agent efficiency.

Our thesis: by empowering front office teams with similar observability capabilities as back office teams, TheLoops will unlock material improvements in CX by transitioning companies from thinking about customer touch points as a cost centres to growth drivers.

It's very clear that the co-founders of TheLoops understood the importance of storytelling through demos as they provided a complete end to end portrayal of how they will positively impact the customer experience with their intelligent support platform.

Founders that hustle

Somya Kapoor and Ravi Bulusu are accomplished operators spanning product and engineering. They truly embody a product-led dynamic founder duo. Their experience spans decades of senior leadership experience in high growth companies giving them deep domain expertise in the customer service and support space. Somya was a VP of Product at ServiceNow and SAP and makes a capable CEO with product chops. Ravi met Somya at a previous startup, forging a strong working collaboration which led to genesis of TheLoops. Ravi was also Chief Architect at Splunk and had multiple startup roles building state-of-the art ML platforms. Their shared learnings through all of these past roles led them to the realisation that bringing product context to support teams will have significant benefits. Together they make a killer combination and they are the right team to solve the problem.

A compelling business model

TheLoops straightforward subscription business model aligns well with the participants that benefit from the improved interactions their platform offers:

• Team plans help agents or reps have contextual insights right inside the support tools they current use today rather than having to switch. This includes Zendesk for Service, Salesforce Service Cloud, Atlassian Jira or Intercom.
• No-code or low-code connectors to key tools in the product stack such as Splunk, Amplitude, Pager Duty, Pendo, Kibana, CloudWatch and much more, pulls in all the data to stitch and synthesise the insights.
• Workflows help make escalations simple by seamlessly bridging systems and providing the same context to all parties so everyone is on the same page. This applies to helpdesks like ZenDesk, issue trackers like Jira or group chat like Slack, it's about keeping the context in the systems that these teams work in.

Intelligent customer support is just the initial offering for TheLoops. There will be more exciting news on the horizon as they progress their platform roadmap.

The seed phase

TheLoops sits firmly within the Seed phase - and the team is currently rolling out their platform to several well known customers, hiring an awesome US-based team, and developing many patterns from the machine learning engine that will benefit all their customers in turn serving their users better than before.

We are delighted to be partner with Somya and Ravi to bring a step change to customer support interactions for the better. Stay tuned for updates on their website (they're hiring), Twitter, and LinkedIn.

A note on the observability thematic

Observability stems from engineering and control theory; it is a measure of how well internal states of system can be inferred from knowledge of its external outputs. In a highly distributed cloud architecture your ability to predict failures is limited. Therefore the solution is observability (vs monitoring) which attempts to pull together Metrics, Events, Logs, and Traces to provide granular insights and to answer why a system may have failed.

These systems are now best practices and part of a typical SaaS stack. They assist the "back office" like engineering and product teams to determine the root cause of an issue. But what about the countless issues that originate from the customer facing side? The lack of tooling for the "front office" like customer success or support creates a major bottlenecks in reporting, triaging, and resolving customer reported issues in a timely manner.

Customer Service tools (e.g. CRMs, CDPs, CXPs, Service Desks etc) are not equipped to provide this context, and observability tools are not built for front office teams. However, front and back office teams can each use observability principles to gain a shared understanding of the customer context to streamline the workflow of customer issues, and in turn, vastly improve the customer experience.

The Loops is building this new and exciting platform for the future of CX. If you're a visionary founder who is ready to make waves, please reach out via our website.

Carted is building an API that can power universal commerce experiences anywhere on the internet, allowing developers and creators to build a checkout anywhere.

The Tidal team recently made an investment into Carted, 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 our investment criteria here.

Markets with tailwinds

E-commerce is an enormous market - USD$10 trillion - and is forecast to grow at ~15% p.a. to 2027 (Grandview Research). Covid-19 further accelerated what was already a clear trend towards online commerce, driving years' worth of e-commerce adoption in months. Tidal have had conviction around the e-commerce thematic for some time, and have made investments in a number of pioneering companies in the space, including Shippit, Search.io, and Drive Yello.

Universal Commerce

Today, the online retail world resembles the physical one, in that we purchase products from a "store", offering a collection of products for sale. Regardless of where customers discover a brand or product - be it search, content, social, or friends - they are taken to the online store to transact.

Universal commerce presents a way to attach a transactional capability to a product, instantly creating a commerce experience. Why does this matter? By enabling a buyer to seamlessly purchase a product or service, where it is discovered, it permits contextual commerce. There are a range of new contextual commerce experiences that could be created - including collaborative, social, conversational video, and voice commerce.

Products that change the game

Enter Carted - who closely embodies our thesis around the next generation of e-commerce, by embedding commerce within the online experiences that users value the most. Carted's vision is to build the API that powers commerce experiences anywhere on the internet, allowing developers and creators to build a checkout anywhere.

The Carted API connects the fragmented players across the e-commerce ecosystem. This enables platforms, creators, influencers, and developers, who previously would need to integrate with brands and retailers one by one, to sell products directly on their own platform, retain customers and traffic, monetise their audience, and build new e-commerce experiences.

Our thesis: if Carted is able to deliver this important infrastructure, it will shift the relationships between buyer, intermediary, and seller across the value chain; and will enable developers to build contextual commerce experiences in entirely new and interesting ways.

In the spirit of The Art of the Demo, the Carted team have this skill in spades. Carted's demo examples are here and here.

Founders that hustle

Holly Cardew and Mike Angell are the team to solve this problem. They are multi-time company builders and accomplished operators with deep domain expertise in the e-commerce space, complementary skill sets, and relentless hustle. Holly has built four Shopify apps and founded Pixc, helping merchants organise their product catalogs, whilst Mike has experience at Culture Kings, Shopify, and Fast, and is a self-taught developer who founded his first e-commerce business all the way back in 2004. Their unique insight and clarity of vision for Carted is borne from their shared frustration of the experience uncovered when they set out to build Vop, where they created a shoppable Tik Tok feed, and realised no single checkout experience could integrate products from multiple vendors.

A compelling business model

Carted's business model is compelling as it simultaneously drives value for stakeholders across the e-commerce value chain:

• Platforms can earn revenue for their content, own their customers, and build new e-commerce experiences.
• Customers benefit from superior commerce experiences created through contextual commerce, including ease of use and a shorter path to conversion
• Merchants/brands benefit through increased revenue opportunities, gaining new customers and increasing product visibility across a range of platforms.

By providing the infrastructure, Carted has the potential to clip the ticket on e-commerce sales and take a slice of a very large pie, with significant volumes. Revenue opportunities for the API include interchange fees, affiliate commissions, promotional codes and product markups, FX conversion, and API calls.

The seed phase

Carted sits firmly within its Seed phase - and will be turning its focus to building out its product, hiring a stellar team, and beginning to connect a vast product index to a variety of integrations to form their infrastructure. They will be striving to build out the core API and demonstrate value across a few platforms - earning the right to connect parties across e-commerce and then building out a compelling product roadmap.

Our experience and thinking on the future of commerce is how we gained conviction at Tidal to back Carted. We are incredibly excited to partner with Holly and Mike on the journey ahead. Stay tuned for updates on their website (they're hiring), Twitter, and LinkedIn.

A note on the future of commerce thematic

There are a number of components in the broader e-commerce value chain. In this context, we observe the transactional aspect of the e-commerce experience evolving across a spectrum:

• Firstly, a centralised model of aggregation and scale, embodied by Amazon
• Then, a decentralised model of platforms & services for vendors, embodied by Shopify
• Next, a universal commerce model blurs the lines of what a traditional store, merchant, affiliate and more is, and therefore opens up entirely new experiences that are defined by a creative ecosystem.

Carted is building this new and exciting infrastructure for the future of commerce. If you're a visionary founder who is ready to make waves, please reach out via our website.

Thanks to Max Kausman for help drafting this post.

Shippit is a logistics orchestration platform enabling the selection and management of carriers for delivery of goods by retailers of all sizes.

Earlier this month, Shippit announced a A$30 million Series B led by New York-headquartered venture capital fund, Tiger Global. This brings the company's total funding to A$41 million since 2017, commencing with the Seed round led by Tidal Ventures (branded as AddVenture Fund at the time).

Let's travel back in time for a minute and look at the opportunity from the perspective of our 2017 investment notes.  

Markets with tailwinds

We shared a belief with many investors that e-commerce would be the long-term retail transaction method of choice for consumers. The purchase convenience of any time, anywhere, along with the unlimited choice and price comparison consumers have online was always going to outshine a physical store.

It was our view that both the logistics infrastructure and the overall experience for the Retailer and the Consumer were broken.  The average NPS for delivery experience in Australia hovered around -35, so we clearly weren't the only ones with this view. The broken state of this market looked like a classic technology opportunity to us.

Our thesis: changing customer expectations & innovation that disrupts legacy systems and improves supply chain inefficiencies will power the growth in e-commerce globally

Founders that hustle

Cliché, but this continues to be a question we ask ourselves for each new opportunity: can the founders do what it takes to persevere. What we recognised in Rob and Will as founders from our very first meeting was their uniquely complementary skills, their unhinged enthusiasm for the challenge, and most of all, their ability and willingness to listen and learn from others.

The Seed round was all about investing in Rob and Will as founders to see if they could execute a basic and repeatable promise and experience to retailers. They nailed it.

Shippit continues to demonstrate one of the best can-do cultures we have seen.

Series A: a defensible moat

Fast forward to Series A. We examine how the company created a moat surrounding its product and opportunity set, the key to it cementing a credible position within the market.

Building trust with customers

As a 'SaaS as a Network' business, the size of the marketplace (or network) was critical to underpinning demand for the software. To achieve material growth in the network in the early days it was critical to build demand volume that would provide for a critical mass of suppliers (carriers). Winning large volume Retailers to underwrite the ability for the business to attract carriers on the platform was key. The business focused on winning key logos early, whilst simultaneously creating brand association & awareness through content-led programs like the Rocketeers of Retail.

This volume also enabled the company to prove out its carrier selection algorithm, an automated assessment of the "right carrier x right delivery type x right price" (think of this as the logistic industry’s version of Google’s quality score!). Shippit began to provide Retailers with an aggregated view of their deliveries and started directing volumes to carriers a Retailer may never have used before. The improved performance off the back of these initiatives formed the foundation for a trusting relationship between Shippit and the Retailer.  

Shippit offered Retailers transparency. The delivery of that promise (no pun intended...) built a small flywheel in its volume momentum that has underpinned the business’ growth to date.

Route intelligence

Building a sustainable competitive advantage through the delivery insights provides benefits beyond their customers, but also the parcel recipient.

Shippit is able to intelligently route parcels for e-commerce retailers and in turn provide superior quality, performance and rates.

Series B: Product-led growth

We talk a lot about product-led-growth ("PLG") within the virtual four walls of Tidal. We see this as a critical capability for a startup to achieve superior unit economics and significant operational leverage.

Shippit’s ability to unlock the value of PLG in the last 12 months played a critical role in the success of its Series B.

Things at Shippit were growing exceptionally well from the end of 2019 into early 2020, but we still had to ask ourselves all the normal questions when COVID hit: 'How will we be impacted? Do we need to cut costs? How will we keep staff safe? How will we change the way we sell when we can’t meet anyone?'.

Rob, Will,  the entire leadership team and staff stepped up and made some tough calls – they reduced the workforce by 20% and cut expenditure on non-core projects. Most importantly, Rob and Will sat back and asked the question:

What does this give us the opportunity to do and can we make changes for the better for our business, staff and our customers?

The actions they implemented in response have led to achieving some of the best growth SaaS operating metric's we have seen in any market. John Curtius from Tiger Global agrees with us, having been quoted in the AFR saying, "Shippit has some of the best metrics we've seen for a company raising at this stage".  

Positioning and customer segmentation

We took a deep-dive with the team on the positioning of Shippit’s value prop for each of its customers segments. The end result: Enterprise and SMB segments now have fundamentally different messaging and value propositions, which drive more efficient marketing spend and higher customer satisfaction & stickiness.

High volume funnel

The most significant change was the process of structuring their inbound funnel to support high volumes. Introducing more self-serve capabilities allowed the shift from pre-sales to post sign-up product qualified leads that were either pure low-touch or assisted by a Customer Success function. This materially impacted their ability to acquire customers efficiently at scale. This transition (which is in continual refinement) came to fruition when the explosion in demand during lockdown serviced the step-change in growth with limited headcount expansion.

By capturing leads after a customer had experienced firsthand the value of the platform, Shippit was able to bypass the need to "sell the dream" and focus on an exceptional customer experience and revenue expansion, thereby unlocking the strategic value of PLG

To a billion parcels and beyond 🚀

We’ve now invested in Shippit at Seed, Series A, Series A extension, and Series B, and we know we’ll keep going. We are in the early days of mass consumer adoption of e-commerce and we believe these founders and this business has what it takes to build a significant enterprise. We congratulate them on the journey so far and look forward to the challenges ahead.

A note on the e-commerce thematic

We have strong conviction that there will be a number of winners in the e-commerce tooling space – in other words, the businesses that provide the picks and shovels to Retailers that help them build and deliver great experiences for their customers (other examples span product search, payments, inventory management and so on). Post-transaction, logistics for the fulfillment of the order is a critical component to ensure an e-commerce experience has comparable or improved benefits over traditional shopping. Shippit is advancing towards this ambitious goal within Australia and South East Asia. If you're a visionary founder who is ready to make waves, please reach out via our website.

Upflowy is a low-code signup engine that empowers growth leads to build and test lead signup flows without needing to utilise the scarce resources in their engineering teams.

This month the Tidal team made an investment in Upflowy and we're publishing our investment notes below. Although 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 our investment criteria here.

Markets with tailwinds

We are in the midst of a customer experience movement and trend toward self-service online. Businesses need to respond with slick and more efficient / high converting digital products. To achieve this, testing and iterating on new products has become the norm and businesses that look to acquire customers online understand that the user experience and journey through the funnel needs to be continuously optimised.

But there is a problem and it is two-fold.

1. Growth teams that are looking to optimise the customer journey through the online acquisition funnel are constrained by the product roadmap and tech availability of the business. We have experienced this issue directly in our own portfolio companies. One of the Upflowy founders was previously solving this problem at his last business using a complex array of 90 online forms. We know early stage product-led growth companies with teams of 10+ people trying to solve this problem by stitching together basic tools.
2. It is exceptionally difficult for most teams to set up and track an end-to-end customer journey funnel, with all the relevant metrics. Tools like Hubspot are doing a good job of owning the Top of Funnel metrics piece, but there are limited options to track the user journey from discovery through onboarding and offboarding and data & insights into this critical part of the acquisition funnel is limited.

Products that change the game

Upflowy provides a SaaS product for growth teams to build user flows and test and iterate against those in an easy to use, low code environment. This significantly alleviates the burden on the IT side, and democratises the ability for low-tech users to move forward with continuous user flow updates. The product also opens up access to end-to-end funnel analytics, which gives instant insights into the performance of the funnel and arms the team with the data they need to make changes to the user experience.

The 'hook' for the customer is the ability for marketing/product teams to build sign-up flows without needing to divert resources from the engineering team. The 'currency' of the product is the data and insights around customer journey through the funnel, which is directly correlated to converted revenue.

Our thesis: if Upflowy is able to demonstrate clear improvements to sign-up flows right at the point of the customer's customer transaction, it will be sticky and defensible within its customers day-to-day test and optimise workflows.

Founders that hustle

The Upflowy founding team is the one to solve this problem. All three co-founders have successfully built and exited multiple startups. Guillaume Ang is a serial entrepreneur and B2B SaaS growth expert. Matt Browne is also a serial entrepreneur with exit success from Whispli and DoneSafe. Alex Girard is leading product and engineering, having built 20+ SaaS products and held technical co-founder roles. The team has come together with a mutual frustration for the problem at hand and the necessary skills across ops, growth and product to build a globally scalable solution for the market.

A compelling business model

The great thing about low-code products is that they are easy to use by design and are usually built with a specific target user archetype in mind. This lends itself well to a product-led growth model, which we know creates compelling business value over time. This is a great starting point, but the real amplifier of value creation comes from layering on top immense value creation for the customer itself. By 10X-ing the customer's online conversion rate through better sign up flows, Upflowy earns the trust of its customers right at the point that matters to them the most: revenue generation. This gives them the right to further monetise that customer relationship with better product, data and insights over time - that is the beauty of the next evolution of SaaS businesses that unlock valuable primary data that didn't exist before.

The seed phase

We loved the speed with which the Upflowy founding team were able to get an initial test product in market, validate it with early customers and build a business case and growth plan around it for their Seed Phase. Whilst the core focus early on has been around the 'brute force' part of working closely with early users and hitting the phones, the founders have done this with an eye toward their scalable path to market and are building for a frictionless growth plan from day 1. Next step will be to make a beautiful product easily accessible to customers and start testing growth channels.

Using these core principles, we gained conviction at Tidal to back the Upflowy team early in their journey and we look forward to welcoming them into the fold and supporting them as they pursue their world domination plans through their seed phase.

A note on the low code / no code thematic

Business users want access to the productivity, workflow automation and data accessibility that they have become accustomed to in their consumer experience of technology. But they don't want to have to learn how to code to get it and nor should they. The low code / no code movement is about democratising the ability of business users to build the tools they need, alleviating pressure on core engineering teams and drawing on their unique knowledge of the problem to be solved. This will speed up the capacity for teams to innovate and create.

Upflowy is just one of many tools that we see emerging in this category. If you're a visionary founder who is ready to make waves, please reach out via our website.

‍