A pivot from retail to aged care helped this start-up raise $10m

Speaking to The Australian Financial Review, Mr Momsen said there was now a regulatory onus on aged care businesses to meet certain service standards, and it was able to win a deal quickly with St Vincent’s.

When the pandemic struck a week later, St Vincent’s attention shifted from measuring customer experience to managing compliance burdens and keeping residents and staff safe during outbreaks, and Zipline began adapting its platform to suit its needs.

“We had built a highly experimental product team where we could spin out a product in a week or two and validate it, so we thought this was something we had the building blocks [to do],” Mr Momsen said.

“We focused on solving compliance challenges – if a plumber goes into an aged care home [for example], they need a police and working with children’s check, and a flu vaccination. Usually, that process would be done manually... then there were COVID-specific ones like checking temperatures and vaccination certificates.

“[Now] we still measure customer experience, but our primary focus is compliance challenges.”

After adapting its platform for St Vincent’s, the company contacted as many aged care providers as possible to find out what compliance needs they were struggling with.

Zipline’s platform is now being used in one in three aged care homes in Australia, and it has expanded into the hospital market. It has made the Financial Review Fast 100 list two years in a row.

Its latest capital raise was led by business-to-business software fund EVP, who wrote the largest follow-on cheque in the fund’s history.

It also had participation from King River Capital, TechnologyOne founder Adrian Di Marco, Aconex co-founders Leigh Jasper and Rob Phillpot, secondary fund SecondQuarter Ventures and the Sypkes family office.

“We’ve been blown away by the quality of the team, and attracted to the way they are building a platform that has a suite of products to solve the most pressing frontline compliance challenges across their global healthcare customer base,” EVP partner Justin Lipman said.

“As our sole area of focus is B2B SaaS, we are drawn towards software products that are deeply ingrained in the workflow of its customer base, and Zipline’s software provides a clear example of this.”

Mr Momsen and some senior management sold a small portion of their shares to SecondQuarter as part of the raise. The fund also participated in the primary equity raise.

The funding comes on the back of its expansion into the US market, where it entered with a strategy of establishing a niche and then expanding.

To date, it has been focused on winning aged care businesses in California, but with the new funding, it plans to expand throughout the US.

“We love this concept of ‘nail a niche’ - not because it’s small, but because it’s focused. That’s our mantra,” Mr Momsen said.

“We’re now at the point of enlarging the niche... then we’ll look at the next adjacent vertical like we have done in Australia going from aged care into hospitals.”

To win customers, the business make concrete promises around how quickly it can speed up things like a company’s recruitment compliance processes, and also pledges if a customer is fined for a relevant compliance breach, it will pay the cost.

“What we’ve learnt ... in enterprise selling is that it’s important to link our success criteria before doing a deal,” Mr Momsen said.

“Recurring revenue is only good if you get recurring impact.”