Sydney based corporate ridesharing startup Liftango has closed a $675,000 seed round after battling through a number of failed pitches, with co-founder Trystan Eeles warning founders to not count their chickens before they hatch.
The startup was founded in 2016 after Eeles and co-founders Kevin Orr and Alexandre Girard had a stroke of genius while sitting in peak hour traffic on the way to work. Liftango offers corporations, organisations, and educational institutions, such as universities, a solution to offer their employees or students an easier way to carpool to work.
Users download the Liftango app and connect to a trusted network of employees of the organisation using the platform. They are then able to organise carpool routes to work, reducing traffic congestion and providing companies statistics on things such as carbon footprint reduction or distance travelled.
Speaking to StartupSmart, Eeles claims the startup represents the third evolution of carpooling; the practice has gone from a “piece of paper taped to a noticeboard”, to user-driven web apps, to Liftango’s platform — an organisation-supported tech-focused mobile application.
“Flexibility is a big component of the app, users can carpool one day and not the next. We also implemented a number of incentives because if you want to permanently change people’s behaviour you need to entice them,” Eeles says.
Those incentives include guaranteed car parking spaces from the organisations supporting Liftango, and fuel vouchers, which Eeles says helps “gamify” the platform and draw new users.
So far the startup says its gotten a good mix of both corporate, educational, and public service organisations on board, including Qantas, NIB, NSW Health, and the University of Newcastle.
“Each have different motivations for using Liftango. The big corporates often have parking pressures, which we help with, and government organisations and universities like the social responsibility angle,” says Eeles.
The company went through Slingshot’s JumpStart accelerator to help test the product in the market, and midway through last year started putting feelers out for a seed funding round.
This week it announced it had finalised that raise at $675,000, led by angel investor Richard Mergler. Also contributing to the raise was venture capital fund Artesian and Australian automotive company GUD.
“During the funding round we were keen to find smart people and smart money — investors in the automotive industry or in socially responsible businesses,” Eeles says.
“Smart money is something I can’t stress enough for startups. I know it sounds a bit selective, but being selective during your seed round will set you up with the best network. Don’t underestimate the value investors add beyond cash.”
For Liftango, that said cash will be funnelled into a number of projects the team has on the boil. This includes an on-demand bus project, which has attracted some interest from Transport NSW and some players in the private bus sector, with Eeles picking the industry as one with great growth potential over the coming years.
The company will also be looking at a potential autonomous vehicle project towards the end of 2018 to further support the startup’s strength in the corporate carpooling space.
“We’re hoping to use some of the money to keep growing our corporate carpooling offering locally and overseas, and our chief executive Kevin [Orr] is in the US at the moment drumming up interest,” he says.
Reflecting on the raise process, Eeles warns founders to not count their chickens before they hatch. The Liftango team started off strong when seeking funding, but maintaining that momentum was challenging, he says.
“The first pitch we made, we got such a positive response, but the next five didn’t follow that trend and we got a bit of a false sense of confidence. So don’t count your chickens, but be persistent and keep cracking,” he says.
“We were also planning to raise a bit less but we pitched GUD at the last moment which led to us extending the round, so don’t be closed to opportunities when you think the round is already closed.”
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