Ukrainian business analytics service raises a round from a Finnish fund at a valuation of 1.3M euros
A Ukrainian startup Kira is developing an analytics service for small and medium-sized online businesses. Recently, the team raised a round from the Finnish Venture Fund Icebreaker.vc at the evaluation of 1.3 million euros and shared the product history and deal details with AIN.UA.
The startup is working on an analytics service for online businesses. It offers customers to incorporate its tracking code on their sites and integrates all data sources (CRM, Facebook and Google ad accounts).
“It’s like Google analytics on steroids. The result is a single dashboard that shows all the necessary KPIs of the business. After that, our AI analyzes how advertising campaigns behave, predicts sales and notifies the client if something goes wrong (for example, cost per lead has increased),” co-founder and COO Alexander Bryukhovetsky explains the ins and outs of the project.
Bryukhovetsky is a marketing specialist by education. He lived and worked in London for a while in a large educational holding, but then returned to Kyiv to develop his projects. Then he got help from Evgeny Sysoev from AVentures, who recommended him to his portfolio companies as a marketing specialist. Speaking at dedicated events, Alexander met the marketing specialist Yevgeny Shevchenko (aka Eugene Shepard), who then became a co-founder of the company. He also was behind the idea of the product.
Initially, he tried to sell the MVP version of Kira for $1,000, gradually raising the price tag to $5,000 to find out how much customers are willing to pay. But, according to Bryukhovetsky, this model had a flaw: custom development, which took a lot of time and resources. Therefore, they decided to go with a SaaS version.
Looking for investments
According to Bryukhovetsky, at initial stages, the team needed money and expertise. It seemed to them that one of the Ukrainian b2b accelerators combined those two things well. According to the founders, the accelerator originally promised:
- financing: $25,000 for a 9% share (which seemed acceptable to them);
- trackers with successful cases;
- transparent terms of the deal.
It turned out that most of the mentors were friends and acquaintances of the team; the tracker stopped responding to messages after the question “does he have experience launching at least one successful business”; terms of investment compared to other accelerators were unfavorable, clarifies the project’s COO, citing as an example the New York accelerator from Quake Capital that offers $200,000 for a 5% stake.
“The decisive factor for us was the change of terms of the contract on the very day when the funds were due for transfer. At the meeting with the head of the accelerator, we refused the money, which was an extremely difficult decision for us. We went nowhere, with debts to developers and a complete lack of understanding where to look for money to launch the product,” says Bryukhovetsky.
Finding Finnish investor
After leaving the accelerator, the startup was on the lookout for an investor, focusing on overseas angels and funds, as well as investment terms which offered more than just money, and the nature of startups in the portfolio. The search continued for four months until a startupper familiar with the Finnish startup ecosystem advised to check out this market.
According to the team, Finland’s market is ahead of the game in this regard. For example, the 50,000 euros Tempo public grant is the first in the chain of public financing by Business Finland. It is followed by two grants to the tune of 250,000 euros each, and then a 750,000 euros loan from the state. You need to be an innovative project, register a company in Finland and attract private investment to apply.
Securing the formal support of Business Finland, the startup began looking for a local investor. For that, they used AngelList, Seedinvest, StartEngine. The project pitching to Icebreaker fund took a month and went through three stages.
“The key insight is that you should never despair if your letters remain unanswered. Any contact, even insignificant at first glance, can lead you to the ultimate goal,” says the COO of the project.
As a result, the startup made appointments with five funds, several angels, and the team took off to Helsinki. Ultimately the company made a deal with Icebreaker valued at 1.3 million at the pre-seed stage.
Plans for the future
Now the company’s back office is headquartered in Kyiv, at Lift99. But the team often flies to Finland to attend conferences and meetings with the investor and plans to open an office in Helsinki by year’s end. The company is planning to spend investments on the SaaS version of the product, marketing, and new employees. The team has grown from 3 to 7 people and is currently looking for PHP developers and data analysts.
The team plans to raise 2 million in investments and get enough traction to tap into the U.S. market.