Flowingly founder Jon Kalaugher surrounded by some of his startup's staff. Numbers have quickly swelled to fifty since it started selling its automation software in 2017. Photo / Chris Keall
Flowingly founder Jon Kalaugher surrounded by some of his startup's staff. Numbers have quickly swelled to fifty since it started selling its automation software in 2017. Photo / Chris Keall
Auckland software startup Flowingly is lining up a US$5 million ($7.8m) seed round and targeting a US$10m ($15.6m) to US$15m ($23.4m) seed round around 18 months later.
The company makes software for business process automation, process mapping and workflow automation, from onboarding employees to managing projects and budget requests to the likes of performance reviews and health and safety assessments. It can also be used for customer onboarding, and automating elements of after-sales service.
Founder and chief executive Jon Kalaugher says while workflow automation software is nothing new, the incumbents are "owned by the IT department".
His company often comes up against US outfit Nintex (which acquired NZ-based Promapp last year, which it pitches as easy to use).
Kalaugher says his startup has used the advent of the cloud, and modern practices, to create workflow software that can be wrangled by everyday staff.
After an extended tender process with a Fortune 100 company in Europe, which saw Flowingly pitted against two well-established players, his company's software was chosen because it was the one rank-and-file staff found easiest to adopt.
Kalaugher says he can't name the company, but does offer that it's in the consumer space and that the contract is worth $750,000 a year. The Fortune 100 player has now moved thousands of staff onto Flowingly and will ultimately onboard around 70,000.
Locally, Te Puni Kōkiri (the Ministry of Māori Development) is an early customer, with around 500 staff using Flowingly.
Across the ditch, its customers include the East Gippsland Shire Council, covering a chunk of Eastern Victoria.
All up, Flowingly added 100,000 users so far this year.
This is not Kalaugher's first time at the rodeo. He founded and managed IT services outfit Securecom in 2002, then sold it in 2009.
Through his one-man company MK1 Ventures, he was an early backer of a string of successful software-as-a-service or "cloud" start-ups, including PushPay, AskNicely, Cin7 (hold that name in your thoughts), Joyous and Plexure.
And after selling Securecom, he founded Naverisk to create workflow automation software for managed service providers and IT professionals. He says it was a classic case of requiring such software for the companies he was involved with at the time, finding nothing, then building it himself.
Naverisk - still owned 100 per cent by Kalaugher - was bought by Texan company ECI in 2015 for US$15m.
In 2016, he founded Flowingly, he has so far funded himself. It started to sign its first clients in 2017.
Flowingly founder Jon Kalaugher surrounded by some of his startup's staff. Numbers have quickly swelled to fifty since it started selling its automation software in 2017. Photo / Chris Keall
Last year, ECI - which had changed strategy as it was quickly shuffled between three different private equity owners - wanted to offload Naverisk. Kalaugher bought it back on what he says were very favourable terms. He now runs Naverisk and Flowingly alongside each other, with a shared back-office.
And it's quite a unique office. Flowingly currently occupies the basement of the building at 35 High St in the Auckland CBD - a space better known for destroying brain cells than building intellectual property (during the 1990s, it housed the iconic Cause Celebre and The Box, where visiting celebs like U2 and Harvey Keitel rolled down the stairs for a drink).
But Kalaugher sees staff numbers growing from around 50 today to around 80 with the seed round, and he's already on the hunt for larger digs.
Just visited the basement of the building at 35 High St - home of The Box and Cause Celebre back in the day (https://t.co/fHV5XDTEm3). Now houses a software startup. But in a stairwell, and a far corner of the office, traces of its old life persist pic.twitter.com/ULgZOITf5X
He won't say when Flowingly might get into the black. In the grand tradition of SaaS companies, it's currently focusing on growth over profit.
And he says when expanding its business, he's focusing on larger organisations.
Startups often focus on SMEs, which are often more open to change. But after running several startups, Kalaugher is now firmly of the view that it's better to focus on the top end of town.
RFPs are much more gruelling, but larger organisations tend to be more focused on features over price (Flowingly costs from US$199 per month for a minimum 10 users), and are less likely to churn.
Flowingly currently occupies the basement of the building at 35 High St in the Auckland CBD - a space better known for destroying brain cells than building intellectual property. Photo / Chris Keall
Larger organisations are also more likely to have re-organised under an "agile" restructure that sees small cross-functional teams given a high-level of independence.
"Our secret sauce is that Flowingly truly empowers autonomous teams to 'own' their processes," he says.
Assuming the seed and Series A rounds are successful, Flowingly will hire more development and sales staff.
Its founder is also plotting a move into a new market.
"We are developing RPA [robotic process automation] capabilities underpinned by machines learning and AI [artificial intelligence]," Kalaugher says.
"We will offer the world's first all in one process automation platform, from mapping to automation to AI-driven robotic automation."
