The brains behind mentoring software startup Mentorloop have closed an oversubscribed seed round, raising $725,000 from Blackbird Ventures, Rampersand and Tempus Partners to bring their total funding to more than $1 million.
Launched in 2015 by Heidi Holmes (COO) and Lucy Lloyd (CEO), Mentorloop is a cloud-based, mobile-first platform that assists corporates, universities, not-for-profits and government with introducing and delivering a mentor program – or enhancing an existing one. Last year, the founding duo raised $300,000 for their startup from private investors including angel investor groups Innovation Bay and Melbourne Angels as well as former StartupAUS director, Glenn Smith.
[Related story: “Companies underestimate the demand for it internally”: former Adage MD on mentoring]
Holmes, a KPMG alumni and the former MD of mature age jobs board Adage, spoke to Dynamic Business about the plans she and Lloyd have for the seed capital, the value their new investors are already generating for Mentorloop, and how her startup is optimising the mentoring process.
DB: How much did you set out to raise and for what purpose?
Holmes: We emerged from the Startmate accelerator, earlier this year, with new learnings and more than 30% month on month growth, so it made sense for us to keep that momentum going and roll into a seed round.
With consistent monthly revenue, we set out to raise $500,000 to fund investment in the business and the team so that we could better service existing and new clients as we continued to grow.
Not only did the round come together quite quickly, we raised a little bit more than we expected. Plus, we’re so rapt with the VCs and individual investors that have come on board – it’s a quality ensemble.
DB: What criteria did you apply when seeking out investors?
Holmes: For us it has always been about more than the money. We know first-hand how critical mentors are to ensuring personal development and business success. Not only in providing timely and relevant advice, but also to challenge ideas and assumptions to ensure you are always striving to be the best. There is no doubt that our investors bring an immense amount of mental capital to the table that we’ve already benefited from and will continue to draw on in this next exciting phase of the business.
DB: How did you go about attracting the right investors?
Holmes: We set about building relationships with our investors before we needed the money. It doesn’t matter how much or from who, taking investment from someone comes with huge responsibility. Not only are they investing in the business, they are also investing in us – the founders – so it was important to us that we were 100% transparent as well as patient throughout the process.
DB: What success have Mentorloop and its clients had in 2017?
Holmes: This year we’ve seen over 500% growth in revenue and we now boast a suite of 28 clients across the US, Australia, the UK, Canada and Asia – from corporates through to industry bodies and universities, including RACV, Institute of Public Accountants, TAL Insurance, the Australian Olympic Committee and Monash University.
We’ve helped all our clients tap into the latent demand for mentoring (giving people what they actually want), with programs being oversubscribed by up to 80%. Fortunately, oversubscription is a good thing, because demand has been easily met through the use of efficient software.
We’re also enabling our clients to improve knowledge sharing within their business, foster a greater sense of community and connectivity, as well as open senior leaders eyes up to the benefits of reverse mentoring. 92% of participants involved in Mentorloop facilitated mentoring programs, saying they want to continue mentoring – so it’s working.
Mentoring is also a very human and personal thing. While there are many tangible benefits we can report on, sometimes the true value lies in the personal anecdotes of how these connections have resulted in a promotion or even changed a life. This happens… a lot.
DB: Regarding your client base, what organisations do you target?
Holmes: We work with clients of any size and complexity but our real sweet spot is organisations with 500+ employees. These organisations are looking for people-focussed initiatives to attract and retain the best and brightest talent. They are looking for ways to increase the bottom line while maintaining or improving employee satisfaction. With Mentorloop, they can do that.
DB: How is your platform optimising the mentoring process?
Holmes: Mentorloop provides a framework in which unique mentoring relationships can flourish at scale within and across organisations. For too long, effective mentoring programs have been impossible to run with spreadsheets and email, and they’ve been viewed by organisations as a ‘nice to have’. We now know from decades of research, however, that mentoring is critical for organisational success, delivering significant retention rates amongst people engaged in a mentoring program; namely, 69% for mentors and 72% for mentees.
Employee development plays a crucial role in businesses seeking a competitive edge; however, it’s becoming less about organisations sending people on training courses and more about giving employees permission to self-drive their own learning outcomes. Personal analytics have been trending for the last decade, with things like the fitbit and apps like Sleepcycle; we’re all tracking and optimising ourselves. But there hasn’t been much optimisation in professional development, which hampers career progress and organisational productivity everywhere. Relevantly, Mentorloop helps people identify their goals within a professional context, and matches them with the most relevant mentor who can help them achieve them. Once these matches are made, Mentorloop then creates a drumbeat of forward progress for the mentoring relationships through the software itself as well as helpful resources and support.
For companies interested in a modern, dynamic approach to mentoring, Mentorloop acts as an internal CRM called ‘My Match’, allowing staff to browse and connect with relevant support and advice from any other person within their organisation, on-demand. I would have loved to have access to something like this when I was at KPMG.
DB: Having completed a seed capital raise, what’s next for Mentorloop?
Holmes: We will now look to build out our team and product so that we can continue to fulfil our vision of delivering quality mentoring outcomes at scale. The raise also means that we will continue to take effective mentoring to other parts of the world.
We’ve already seen a 300% increase in qualified international enquiries over the past seven months, so we are looking forward to expanding our market penetration further into the US and the UK in particular.