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February, 2024

Ritson-backed NZ brand tracking start-up Tracksuit lands $20.5m Series A funding round for US, UK expansion, hits $142m valuation – sights on Qualtrics, Ipsos, Kantar, Nielsen, YouGov

New suitors

Frank Body co-founder Bree Johnson, former Airbnb global product lead Lenny Rachitsky and Silicon Valley VC firms Altos Ventures and Footwork have joined early backers of brand tracking start-up Tracksuit, which is slashing the cost and turnaround times of brand tracking and measurement.

Cannes Lions and WARC parent, Ascential, newly cashed-up with US$835m paid by Omnicom for its Flywheel business, along with Mark Ritson and Australian VC Blackbird Ventures, an investor in Canva, were early backers of Tracksuit, co-founded by Connor Archbold and Matt Herbert.

The capital injection will be used to fast-track Tracksuit’s expansion into the US and UK markets. 

Johnson said it was “no secret I’m a big fan of Tracksuit. Having used the technology at Frank Body and experiencing first hand the impact it had on our business, it was a no brainer to invest in their team and their vision. I feel very honoured to come along for the ride, and look forward to seeing Tracksuit change the way people view brand and marketing.” 

Growth tracker

The big name endorsements in the latest funding round are aplenty. Former Walmart and Stitch Fix Chief Operating Officer, Mike Smith, now co-founder of San Francisco-based VC, Footwork, said Tracksuit had the “most special culture we’ve heard about down under” since his VC partner Nikhil Basu Trivedi invested in Canva a decade ago. The business has exceptional signs of product-market fit — not just as a company based in New Zealand, but compared to others around the world,” Smith said. Smith will join Tracksuit as a board advisor, Mark Ritson becomes a “formal advisor” and the other Silicon Valley VC which joined the Series A round, Altos Ventures, sees its Managing Director Anthony Lee, join the board. The General Partner of Australian VC Blackbird Ventures, Samantha Wong, was appointed to the board in the earlier funding round.   

“Tracksuit has created a simple, beautiful solution to a very real problem, and we’ve heard from many customers who love the product,” said Lee, who will help Tracksuit crack the US market. “We were impressed by their early traction across four markets, all while being super efficient and maintaining a bootstrapped mindset.”

Tracksuit is tracking 4,000 brands across Australia, New Zealand, the US, UK and Canada. Last year the company said it was tracking 2,200 brands in Australia and New Zealand. 

Performance flip

Co-founder Connor Archbold was an M&A lawyer, investment fund director, and scout for Blackbird and spent a good slab of his career in the US advising big start-ups during the first wave of direct-to-consumer commerce ventures. 

In a podcast and story last year with the co-founder of Australian SAS-based econometrics firm Mutinex, Henry Innis – the two firms struck a non-equity alliance – Archbold noted a common pattern emerge during his time in the US: start-ups tended to over-invest in performance marketing until customer acquisition costs became unviable. “That’s great for capturing low hanging fruit early on,” Archbold told Mi3. “But eventually it becomes very difficult to sustain growth if you’re not also investing in brand and building awareness alongside it.”

That realisation hit home during Covid, he said, when the likes of Airbnb pulled back almost entirely from performance marketing and emerged from the pandemic all-in on brand. Meanwhile, ROI within channels such as search and social has declined as they have matured, per Archbold, with VCs now asking pointier questions around cash burn amid tighter money markets and a tech shakeout.

“It usually costs over $100,000 to get an always-on brand tracker from one of the big players and it’s also often delivered in a way that isn’t quite usable for a small, nimble team – 100 page slide packs rather than in an easy-to-use dashboard,” Archbold said in the Mi3 podcast and feature last May. “We’re tracking 2,200 brands across Australia and New Zealand. We understand who’s aware of those brands, who considers buying them, who prefers them, and then some qualitative information as well – what people think and feel about those brands.

“We’re performing those surveys every week, and we’re displaying that in a dashboard that is constantly updated. It’s the same data and product – in the sense of the information that’s flowing through – as what the large market research players do for brand tracking. The difference is that it’s live and people can log-in whenever they want. We have simplified the dashboard as much as possible so that marketers feel comfortable sharing it with boards and C-suites,” he added. “It makes brand a little more easy to digest.”

Archbold claimed that approach – while negating the need for “white glove service” and consultants to walk marketers through those meaty slide packs – is how Tracksuit can make brand tracking 80 per cent cheaper. A lower cost to entry, he suggested, means a much bigger addressable market. 

“There’s a big brand tracking market in New Zealand and Australia. About half of our customers were doing some form of market research, usually an annual dip to see where they sit in the market. The other half of our customers weren’t doing any market research,” said Archbold. “So we’re optimistic that we’re actually doubling the size of the brand tracking market globally.”

Picking winners

Tracksuit and Mutinex along with Amplified Intelligence are Australian start-ups in the marketing and media sectors all pacing fast in their global expansion. 

Mutinex announced another $9.5m funding round last October with a valuation of $75m, led by VC firm EVP, which has 48 other SAS-based businesses in its investment portfolio. EVP Partner Justin Lipman told Mi3 at the time he expected Mutinex to be a $100m revenue business as it expanded into the US.

“Mutinex – in terms of comps [comparables] to benchmarks, comps to later stage companies that we look at, comps to businesses at the same stage – in our view, is clearly tearing away,” said Lipman. “As a fund manager, you skew your returns to the winners. That’s what we’re doing with Mutinex in a pretty material way.”