Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 4)

Sramana Mitra: Then what happened?

Jon Ellis: Then someone that I had been speaking to for months, a very wealthy family in Australia, really liked the platform. They had been using it and they said, “We’re prepared to be backers. We’d have to make substantial changes to make some money, but we’re prepared to back you.” They invested $1.7 million in the seed round in a staged payment arrangement.

Sramana Mitra: What did they think you were going to do? When they became your backers, what was the agreement? What business were you proposing to build at that point?

Jon Ellis: We just started charging for our product. That was the first thing.

Sramana Mitra: Who would be paying?

Jon Ellis: The developers would pay and we also charge the agents for access. It was amazing. Overnight, by not just giving your product for free, people started valuing it and using it. It was quite a dramatic change. We also realized quickly that a lot of inflow of money into property in Australia was from China and Singapore where we, very quickly, needed to put people on the ground.

We employed contractors in those markets because we didn’t want to establish companies at that time. We put them on a very small basic salary and a commission component to go and meet agents in those markets and introduce them to our platform. That, very quickly, grew us a market of businesses using our platform. We also made a really important decision, which was to take our marketplace platform and create a second version of it. It was all the same but it allowed the users to white-label their own solution as a premium add-on.

Sramana Mitra: You were selling these white-labeled platform to developers with large numbers of properties under their belt that they wanted to directly control?

Jon Ellis: Exactly. We licensed that software to developers and we also licensed that software to agents on the other side. Now, it means that the real estate could have their own version for their agency and all of the stock in that platform would be up-to-date.

Sramana Mitra: What were you charging for these white-label solutions?

Jon Ellis: At the start, $1,000 upfront and $100 a month.

Sramana Mitra: That’s it?

Jon Ellis: That’s it. We sold 300 of them very quickly.

Sramana Mitra: 300 of them from all over the world or just from Australia?

Jon Ellis: Australia and the Asia Pacific region.

Sramana Mitra: What year is this when you made this shift and things started to look better?

Jon Ellis: 18 months ago.

Sramana Mitra: What revenue number did you finish 2014 at?

Jon Ellis: About a million dollars.

This segment is part 4 in the series : Building a Robust Business in Australia: Investorist CEO Jon Ellis
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