What you need to know:

• Mutinex’s latest capital raise takes its valuation to $75m.
• Its primary backer, EVP, has now invested $12m, the most of the 48 software firms it has backed to date – more than Siteminder, Insite AI, Deputy and Shippit.
• EVP Partner Justin Lipman said Mutinex is pacing at the same growth rate as Australian tech unicorn Siteminder – faster in terms of the “tier one brands” it has managed to attract, per Lipman. “That’s normally a bit of a slog”.
• Growth via brands and agencies continues in the Australian market, said co-founder and COO Matt Faruggia, as cost pressure drives marketers and increasingly agencies to focus on ROI and hard growth metrics.
• Co-founder Henry Innis next month takes a team to the US. He said he’s there "not to try and crack the market, but to execute" – with brands already over the line.

ROI eating the world?

After a fresh funding round that values the firm at $75m, Mutinex will next month set up shop in the US bidding to steepen a growth curve its primary backer, venture capital firm EVP, says is matching that of Siteminder, one of its most successful investments to date.

EVP Partner Justin Lipman is backing Mutinex to build a $100m revenue business, with the firm investing a further $8m in the latest funding round, taking EVP’s total investment to $12m over the last 12 months, its largest to date “by a distance” in a single company.

“I could say a lot of words and tell you a lot of things. But ultimately, we're acting with our profits,” said Lipman. “I think that speaks volumes.”

EVP has 48 software businesses within its portfolio at various stages of maturity across multiple sectors. It usually invests three to four million dollars in each.

“But Mutinex – in terms of comps [comparables] to benchmarks, comps to later stage companies that we look at, comps to businesses at the same stage – in our view, is clearly tearing away,” said Lipman. “As a fund manager, you skew your returns to the winners. That's what we're doing with Mutinex in a pretty material way.”

Lipman said Mutinex is actually ahead of Siteminder in terms of the blue chip client brands it has already acquired.

“In our experience, it's normally a bit of a slog to get going – it's really hard to get brand name tier one customers to use your new software. It's really noticeable to us that there is a level of consistency, quarter on quarter, there's a level of customer advocacy and a clear tier one customer base that the team has been able to attract, which from a standing start this early in the journey really impresses us,” said Lipman.

“For a lot of those other businesses [within EVP’s portfolio] particularly Siteminder, for example, which sells software to hotels, the big brand name chains came much later in the journey, after they had [accrued] significant share globally through the long-tail.”

Hence the VC firm backing Mutinex to deliver a bumper payday (despite Lipman being initially unnerved by 6am calls from Innis).

“There is absolutely an opportunity to build a $100m-plus revenue business for Mutinex," said Lipman. "That is a clear pathway for the team, no doubt."

Tech crunch recedes

Meanwhile, Lipman said the broader Saas market is in recovery following a brutal post-Covid correction that left many swimming naked and suffering from extreme exposure.

“If you look at US tech valuations, there's a lot of narrative around the fall off, but they've actually powered back pretty strongly in the last six months. So we are quietly optimistic that a lot of the negativity is behind us. We're now starting to see broader portfolio growth rates start to accelerate again,” per Lipman.

"I wouldn’t says it’s the exuberance of Covid times; that is not to be repeated. But we're definitely starting to see the market getting back to where it was. We are quietly confident that 2024 will be a similar year to the 2019/2020 vintage in terms of optimism around software.”

Agency reseller model moving

Mutinex's econometric modelling platform is plugged in to a marketing spend pool closing in on $2bn across blue chip brands including Asahi, ING, Samsung, Dominos and TPG Telecom, according to CEO and co-founder Henry Innis,

The firm has also started to sell through agencies – media, via Dentsu and Atomic 212, and creative via Cummins & Partners. Innis said more agencies are signing up as exclusivity periods with agency groups “are coming to an end”. He couldn’t yet disclose which groups.

Fellow co-founder and COO Matt Farrugia said demand for sharper investment analytics from agencies continues to increase as marketers chase harder growth and ROI metrics.

“Agencies are literally re-wiring their teams and building capabilities around our platform and what it can do,” claimed Farrugia. “They are providing better data capabilities for their customers, helping to manage the data that goes in as an input source to market mix modelling."

They are also “harnessing the data points from our platform to help inform strategies,” he said, “using commercial metrics and previous campaign metrics” versus legacy approaches of “research papers and studies … so their strategy gets a lot pointier … and that’s quite a big mindset shift”.

Farrugia pointed to the likes of Samsung and CHEP, this month awarded most effective agency of the year, by way of example: “They have directly pointed to how Mutinex has helped support that.”

Plus, he said, sustained pressure on consumer spending and the knock-on effect for marketers to deliver “more for less” is also driving “a huge amount of demand”.

Lose some, win more?

Despite those tailwinds, Mutinex hasn’t had it all its own way, losing out to rivals in pitching for the likes of ANZ (won by Analytic Partners) and Telstra (Annalect) over the last 12 months.

Innis wouldn’t disclose its win/loss ratio, stating it varies by channel, i.e. RFPs, direct marketing or outbound marketing. “We outperform the top quartile benchmark for enterprise Saas businesses, which is at 30 per cent”, he claimed.

But he said a rising tide floats all boats, “the whole industry has become quite collaborative around the issue of marketing effectiveness”, and is typically bullish about the business replicating its Australian success in the US.  "We've hit some really good traction and we're seeing some really strong signals in that market," per Innis.

With a funded war chest now at its disposal, Innis will lead a team into the US next month, where former Starcom and IPG exec Jon Sintras has been seeding the ground.

“We’re pushing the scale button,” said Innis.

“We’re not going to the US to crack it, we’re going there to execute. We’ve got three or four contracts landing and we need to go and actually work on them.”