Westpac’s tech-focused venture capital fund Reinventure has led a $5 million funding round for cafe services start-up Beat the Q Posse Group, which is poised to rebrand its flagship app after three separate start-ups effectively merged to become one late in 2014. The series A funding round, which the company said was oversubscribed, was also backed by Exto Partners. It is the second investment since late June for Reinventure, which became the first Australian banking venture to invest in a Bitcoin company, Coinbase.
Reinventure and Exto Partners are the first institutional firms to back the group, as foreshadowed by Street Talk, with early-stage funding having come from angel investors including Silicon Valley heavyweight Bill Tai, Yahoo Global chief financial officer Ken Goldman and Google Maps founder Lars Rasmussen. Australian backers include Macquarie Bank head of principal investments Alex Harvey, Reckon founder Greg Wilkinson and Vocus Communications founder James Spenceley.
Beat the Q Posse Group is an amalgam of three formerly separate companies, Beat the Q, Posse and eCoffeeCard, which formally became one company in October 2014. Rebekah Campbell, co-founder of Posse, said the money raised would go towards product development and scaling. The company will rebrand its flagship application, Beat the Q to Hey You, from August 10. “Over the past six months we’ve focused on building the team to scale the business,” Ms Campbell said. “We’ve brought on a senior engineer from Bigcommerce and the head of sales from Groupon, who has a team in Melbourne.”
The motivation for the earlier merger had been the recognition that there could be only one dominant player in the cafe scene, Ms Campbell said. “There were a whole lot of apps attacking different problems in the customer loyalty space. As a consumer I wasn’t using any of the products because I couldn’t be bothered downloading all the apps to use at each cafe,” she said. “We’re going to end up with a winner-takes-most situation and Posse was in a good position because of its scalable network. Adam [Theobald] had built a great product at Beat the Q, and had also purchased eCoffeeCard, so it was a natural coming together.”
Best of three in one
The Beat the Q app, the company’s flagship, lets users order from their cafe en route. The new Hey You app will incorporate features from all three brands. Posse built a service that connects consumers and shops through a social network, and eCoffeeCard was a customer loyalty app.
“We’re looking forward to launching new features such as group ordering and beacon-enabled table service,” Ms Campbell said. The business is processing 40,000 transactions a week, with some cafes taking 100 orders a day using the app. In six months it has increased its customer base by three times and is increasing 4 per cent each week. Mr Theobald said the venture capital scene had developed in the past four years. “It’s a really exciting time … now there’s corporate venture capital coming into the market and it’s increasing interest in the start-up space,” he said. “I have no doubt that it’s difficult as an early fledgling start-up, but I think it’s come a long way and Reinventure is leading that.”
Reinventure co-founder and managing director Simon Cant said he had been following the group for some time and had been impressed by Beat the Q’s high user engagement and Posse’s track record of growth. “Based on the product vision and scaling plan, we believe that the integrated product will become an indispensable tool for Australian cafes and other merchants. We very much look forward to supporting them to achieve that goal,” Mr Cant said.