Hey guys,
You all know what’s happening because we’ve been talking about it for a while, but today is the day we officially announced the latest round of funding.
To give you some context, last time we announced something like this was January 2014. Back then, we were a team of 25 people with 30,000 users and 500,000 reviews.
With that money, we were able to triple our team, sign up 100,000 more users and quadruple the number of reviews generated. Most importantly, we’ve helped our users make 6x more money — 50 million dollars in the last year.
Over the past few months, I’ve had a lot of time to discuss this round with you guys, both individually and as a group, but I wanted to take this opportunity to answer a bunch of the questions I got in one place.
Who are these people joining the company as investors?
We weren’t planning on raising money until Q2 of 2016, but we decided to move forward with the round because it was an opportunity to partner with some really amazing people.
I’m really excited for you to get to know Yuval (who is also joining our board), Luis, Rick, Tomas from Marker, Dror from Innovation Endeavors, and Alan and Abe from Vintage. We’ve known the teams at Marker and Innovation Endeavors for a while and their vibe and vision for Yotpo synced well with ours. The Vintage guys are giants in the Israeli tech scene and having them in the round is a major seal of approval for us.
All of these investors have a proven track record with helping Israeli companies expand to the rest of the world and will be amazing partners as we expand, look for great talent and take Yotpo to the next phase.
If you check out their portfolios, you’ll see we are in good company.
Why $15 million?
We could have raised $25 million in this round, and I wish you had been on the calls where our current investors were arguing because they wanted to put more money into the round — it’s a testament to the amazing work you are all doing.
In the end, raising $10 million more just wasn’t right for us — it would have put too much pressure on us to achieve unrealistic milestones. (see Silicon Valley season 2 episode 1)
Fifteen was the perfect number for us. It’s enough to be aggressive, but gives us some room to make mistakes. Plus, our net burn is pretty low.
What are we going to do with the money?
Mainly, three things:
1. Invest in the team
We are trying to hire the smartest people we know for every position here and also keep you guys extremely happy. This is also an opportunity to announce we’re getting a dishwasher in both offices. Just kidding, you all still have to wash your own dishes.
2. Accelerate product innovation
I don’t need to tell you that we are building some amazing stuff right now. We want to keep doing this and doing more of it.
3. Open a new office
We’re ready to open a third office.
I don’t want to get too emotional, but I am so excited about what’s coming next. This is a huge milestone for all of us, so just take a moment (or a beer) and be extremely proud of what we are building. Now is our time to execute and shine.
THANK YOU (and not in the BS way you sign off emails with “thank you” but actually : Thank You)
-Tomer
