UNIQUE MĀORI START-UP KWOTIMATION ATTRACTS VC ATTENTION
A smart Kiwi start-up which aims to make life easier and more profitable for tradies has attracted the attention of multiple angel investors, led by Rob Vickery’s Hillfarrance Venture Capital.
Initially focused on tilers, founders say that Kwotimation addresses the most common bugbear for tradies: creating a quote and securing the job.
It also gets small businesses online rapidly, with ease and at low cost. The fledgling business has secured some $500 000 in pre-seed capital from lead investor Hillfarrance, Flying Kiwi Angels, Angel HQ, Humi Group, and individuals including several from the Edmund Hillary Fellowship.
Kwotimation is the brainchild of mates Josh Faraimo and Jarome Cavubati and equips tilers to create a complete website and automated online pricing system in a matter of minutes.
Through their work owning and running tiling businesses, the two realised that tradies spend far too much time quoting on jobs they might never do. They also recognised that in a digital age, tradies in general operate distinctly analogue businesses – most have little or no online presence. “While running my own tiling business, I realised I could automate quoting by sending potential customers to my website,” says Faraimo.
Here, they could get an estimate by following a simple three step process. “Within a couple of months, 120 quotes went through. Around one third of those were accepted and turned into jobs, validating the concept. But more telling for me was the two thirds which weren’t accepted – those were 77 trips I didn’t have to make, saving time and petrol,” Faraimo says.
Working with Cavubati, Faraimo saw an opportunity to share the idea with other companies. Cavubati agrees, “It was pretty organic, we thought ‘let’s do that Xero thing’”.
But getting to the point of attracting investor attention or support of any kind wasn’t easy. “We are really the demographic that are least likely to raise money. We’re Māori and Pasifika, we’re tradies with no technical background, and we have no product and therefore no sales. We just had an idea,” says Faraimo. We found government programmes completely unhelpful, leading us down various rabbit holes with no advantage. And when we first approached Flying Kiwi Angels, they said ‘nah’,” says Faraimo.
Disappointed but undaunted, the two went to dedicated Māori business accelerator Kōkiri – with low expectations. “This is a 12-week course which takes you through what it is to be a tech startup. As it happens, it was a huge advantage which helped us understand what a tech business is, what investors want to see, how to pitch an idea. And based on Kaupapa Māori values, it was a huge benefit, with the core takeaway of empathizing with and providing value to the market,” explains Faraimo.
It was in his capacity as a Kōkiri mentor that Vickery first engaged with and was impressed by Cavubati and Faraimo. “I primarily invest in people. In Kwotimation, there is a fantastic idea backed by individuals who know the sector they are addressing and who have what it takes to build a concept into a viable business. And in this sector, there is a gigantic opportunity as it lacks innovation,” says Vickery.
He describes the addressable market as ‘wide open’. “No one is developing anything at this end of the market. There’s no real competition and that means there is only upside for Kwotimation and their customers.”
With Vickery’s backing, and a modest grant provided by Kōkiri, Faraimo and Cavubati were ready to test the market once again. This time around, Flying Kiwi Angels came on board, along with multiple other investors on the successful pre-seed round.
Initially, Kwotimation is looking to add 150 tiling businesses to its platform, with a limited free signup period. These initial customers will provide further validation and feedback, assisting in the development and preparation for delivering the platform at scale.
Vickery believes the potential for Kwotimation is practically unlimited. “This can become an essential tool not just for tilers, but tradies of all kinds – and not just in New Zealand, but around the world,” he says.
“We are proud to support Kwotimation in this pre-seed round. Not only do we love Josh and Jarome’s audacity and vision to create an offering in an unserved space, but we are especially aligned in our shared cause to prove what Māori entrepreneurs can do, showing rangatahi (youth) how to raise outcomes through entrepreneurship. This fits well with our Humi Group vision to help create abundance for all people and we look forward to bringing āwhina (support) beyond just capital to realise this,” says Nathan Bryant-Taukiri, Humi Group managing director.
Aubrey Te Kanawa, Kokiri programme director highlights the impact of the initial success of the start-up: “Kwotimation were one of our standout teams that came through the Kokiri program in 2020. They were actively engaged from the beginning, taking every opportunity to further their business and as a result have rightly and acknowledgement from our team, their peers and been successful in securing investment for their business.”
Faraimo says that a quote is at the centre of transferable value. “We’re reinventing what quoting can be with the power of the internet, for a sector in which maybe 15% of businesses have a website. And we are automating a process they don’t enjoy, which is sacrificing their time and money only to hear a ‘no’ majority of the time. We’re fixing that problem.”