After closing a successful $5 million funding round, Melbourne-based real estate review platform RateMyAgent now boasts a $20 million valuation. According to co-founder Mark Armstrong, the platform has accumulated an impressive database of 18,000 agents and 3,000 agencies, with a new review posted every five minutes.
The funding round was led by Gabby Leibovich, co-founder of Catch of the Day, and the Smorgan Family. This marks RateMyAgent’s second funding round in the two years since its launch.
Armstrong notes that the new funds will be used to expand the company’s development team, with plans to double its size, and to support international expansion efforts in the United States, the United Kingdom, New Zealand, and Asia.
“The funds will be used to support and accelerate our growth plans,” Armstrong told StartupSmart.
THE BIGGEST LESSON
After more than a decade of working in real estate and launching his own businesses, Melbourne entrepreneur Mark Armstrong founded RateMyAgent. Throughout the growth and capital raising process, he learned a crucial lesson.
According to Armstrong, the most important takeaway is that an online business’s backend is the foundation for success. While a visually appealing user-facing front-end is still necessary, it is the backend of a tech platform that truly matters. This is what made the likes of Facebook, Google, and LinkedIn stand out.
Armstrong learned this lesson the hard way with a previous startup, Property Tycoon. Although it looked and felt great, the backend was terrible, not scalable, and labor-intensive to scale.
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, allowing the founders to focus on the technical side of things.
According to Armstrong, the best thing for startups and founders to do is to focus on their business. This lesson helped Armstrong, along with co-founders Xavier Perronnet and Ed van Roosendaal, build RateMyAgent and secure the large funding round.
ADMITTING MISTAKES
According to Mark Armstrong, embracing failure is a key element to the success of a startup. Even if you spend months working on something that is ultimately ineffective, sometimes you need to “throw it out and start again.” Armstrong believes that there is a lot of value in learning from your mistakes, and that the process is necessary for growth.
Armstrong notes that when pitching to investors, having a good idea is not enough. It is essential to sell the bigger picture and the dream of where you want to go as a company. Investors want to be a part of the journey and believe in the vision for the future.
