A Melbourne real estate review platform is now valued at $20 million after closing a $5 million funding round, and co-founder Mark Armstrong says there’s one key thing he has learnt along the way.
RateMyAgent, a platform allowing users to rate and review real estate agents, now has a database of 18,000 agents and 3000 agencies, and Armstrong says a review is posted on the platform every five minutes.
The latest funding round was led by Catch of the Day co-founder Gabby Leibovich and the Smorgan Family and comes two years after the launch of the platform.
Armstrong says the cash injection will be used to double the size of RateMyAgent’s development team and driving an international expansion into the US in August, as well as efforts in the UK, New Zealand and Asia.
“The funds are really there to support what we’ve already done and to grow the business faster,” Armstrong tells StartupSmart.
Before founding RateMyAgent, the Melbourne entrepreneur had been working in real estate and launching his own businesses for more than a decade.
Throughout this growth and the capital raising process, he says there’s one crucial takeaway lesson.
“The most important thing we’ve learnt is that an online business is built on its backend,” Armstrong says.
While it’s still important to have a visually appealing user-facing front-end, he says the backend of a tech platform is what really matters – and it’s what made the likes of Facebook, Google and LinkedIn stand out.
“It didn’t necessarily look great but it hummed like a finely tuned engine,” he says.
And this was a lesson that he learnt the hard way with a previous startup, Property Tycoon.
“It look and felt great but the backend was terrible, it wasn’t scalable and it was very labour intensive to scale,” Armstrong says.
In order to focus on the technical side of things to build an enticing product for investors, Armstrong and his team hired Kidder Williams managing director David Williams to handle the banking and investment side of things.
“When you run a startup the best thing for startups and founders to do is to focus on their business,” Armstrong says.
It was this lesson that helped the entrepreneur build RateMyAgent along with co-founders Xavier Perronnet and Ed van Roosendaal and eventually secure the large funding round.
Another key element to the startup’s success is an ability to embrace failure, Armstrong says.
Even if you spend three months working on something that still isn’t effective, he says sometimes you just need to “throw it out and start again”.
“There’s a lot of value in learning from your mistakes and I’m not sure that we change a hell of a lot,” Armstrong says.
“If you get everything perfect every time you don’t actually learn from the process.”
When pitching to investors, Armstrong says it’s about much more than just having a good idea.
“It was selling the bigger picture – the dream of where we wanted to go as people,” he says.
“The investors want to come along for the ride.”
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Dinushi is a journalist at SmartCompany.
