When Jon Brelig and I co-founded InfoScout in 2011, we had visions of grandeur in our heads, but we really had no idea just how grand our startup journey would be in the five-plus years that followed.
It started as many start-ups do: an empty whiteboard, two laptops (he’s a Mac & I’m a PC), late nights, and a healthy ambition to build anything and everything. But the reality is we could not possibly build everything we wanted to, and we suddenly realized that a duo only allots for so much bandwidth, forcing us to fill the emptiness of the whiteboard with color from just a single idea.
That idea was centered on finding a better solution to measure what consumers purchase, all the way down to the item level and across all stores. Legacy solutions had been around for many decades, but we knew there was a better approach to build a higher quality panel that real people would actually want to join. Smartphone usage was not yet widespread, but both Jon and I saw where that line was heading. So, we focused our efforts around applications that easily allowed users to upload their shopping receipts for rewards and donations. Lo and behold, it worked! In fact, it worked a little too well. While we were accumulating a massive amount of valuable data, it was also quickly eating away at our small cash reserves. The only tenable solution was to go raise venture capital.
At first, we assumed that whipping together a few slides into a pitch deck would be sufficient to quickly raise the cash we’d need. After all, Jon had already founded and exited two successful consumer facing startups, and I had played a central role in growing Retail Solutions from its first few beta clients through to its global dominance as the data-driven enabler of how retailers collaborate with the consumer packaged goods brands that sell products through them. Frustratingly, however, the 40+ Silicon Valley VCs we pitched over the next 10 months weren’t impressed with our pedigrees. They wanted to see traction – whatever ‘traction’ was supposed to mean in the hatching of a B2B2C startup fraught with a massive chicken-and-egg conundrum. The constant stream of depressing VC meetings, rejection emails, and tension-filled drives from Sand Hill Road back up to San Francisco nearly broke me.
If it weren’t for the encouragement of our families (thank you, Reka!), friends, and some fellow entrepreneurs, InfoScout would not have survived its first birthday. Thanks to advice from one very successful and big-hearted entrepreneur, Bill Trenchard, we finally landed our first funding – an angel round of convertible debt, led by market research legend Leonard Lodish, with a number of friends and former colleagues joining in. Jon and I were so stoked to see those initial checks roll in – no matter how small they were – because we knew that it was enough to launch our first consumer apps (Receipt Hog and Shoparoo), which effectively paid consumers for pictures of their shopping receipts.
Within just a few months of launching the apps, we were capturing nearly as many shopping trips as Nielsen, which had been in the consumer panel business for more than 50 years. I guess that meant we had finally found our elusive “traction,” because those previously dubious VCs started taking our calls and scheduling follow-up meetings. And suddenly, after almost a year(!) of pitching, we received our first Series A term sheet from a VC. But not to be outdone, the dynamic duo of Ajay Agarwal (Bain Capital Ventures) and David Frankel (Founder Collective) convinced me to rip up that long-awaited and immediately expiring term sheet so that Jon and I could pitch their partners the following Monday. After a year of failed attempts to secure funding, we did what any rational entrepreneurs would do… we let that first, perfectly acceptable term sheet expire for a shot at a term sheet the following week. My stomach still gets queasy thinking about it.
With a healthy amount of Series A funding in the bank, we quickly turned our app users into the largest and most representative consumer purchase panel ever created. This gave us a wealth of data that helped us secure our first customers – thank you Anheuser-Busch, Unilever, Procter & Gamble, and PepsiCo! With our chicken-and-egg problem solved, we had plenty of interest in our Series B. Thankfully, one of our nascent partners, WPP/Kantar (thank you, Jeff, Josep and Luis!), took a strategic interest in us and led the round. This additional funding allowed us to build a flywheel of continuously accelerating growth driven by a larger consumer panel, leading to richer data, which helped us solve more valuable problems for ever more customers, all powered by a rapidly growing team of great people.
This growth afforded us the opportunity to bypass the dilution of a Series C round altogether, and instead we extended our runway by securing venture debt from City National Bank (thanks, Greg!) and Trinity Capital Investment (you rock, David!). It was a tough decision that just turned out wonderfully by minimizing dilution and allowing greater optionality to consider every conceivable path forward.
And, so here we are at the pinnacle of this startup’s journey, feeling incredibly grateful to Vista Equity Partners for rewarding our investors and employees for the tremendous value they’ve created while paving the way towards an even brighter future with Market Track.
To our angels… Thank you for having faith in two guys and a slide show! We hope this 26x return helps you give hope to a few more entrepreneurs in need of a little seed funding.
To our Series A investors… Congratulations on your 14x return! You made the bet that so many others refused and you deserve every penny in return. Just be sure to thank Ajay Agarwal of Bain Capital Ventures because he played an outsized role in guiding us to this amazing outcome!
To our Series B investor (WPP/Kantar)… We look forward to continuing our partnership with you!
To our employees… Congratulations!!! Your dedication, clever problem solving, and focus on impact are the reasons we get to celebrate this outstanding milestone today. We’ve built an amazing company with a wonderful culture that we will keep intact as we continue this journey together!
And finally, to our customers… Thank you for trusting us as your insights partner. If we do this right, you shouldn’t notice any differences in the short-run, but you should be elated with the combination of Market Track and InfoScout in the long-run. Together, we will close the loop from marketing activities to actual changes in consumer purchasing behaviors to deliver a massive return on your investments in us.
Thank you for joining us on this journey. It’s been a great ride so far, but the best is yet to come!
P.S. – Special thanks to Andre Gharakhanian and Coleman Cannon at Silicon Legal (take a vacation!), Richard Vieira and team at Stifel Nicolaus (Wow!), Alexandre Linares (stud), Indy Guha (BCV), Vijay Nagappan (MHS Capital), Dan Rosen (CommerceVC), Dave Balter, Joan Lewis, and Mark Greenough (Greenough Consulting Group)
Read the official press release on Business Wire.