How Brisbane startup Citrus plans to dominate a $200 billion market.
An Aussie SaaS startup taking on one of the fastest-growing areas of the e-commerce market has locked in multi-billion dollar clients such as Coles and Ocado just 18 months after launching.
Citrus co-founder and chief executive Brad Moran told StartupSmart he decided to launch the company back in 2017 after seeing the success of Amazon’s cost-per-click (CPC) advertising platform.
“They provide a CPC platform so sellers can pay to be at the top of search results, much like Google’s Adwords. That helped turn Amazon into the third-biggest ad platform in the world,” Moran says.
With previous experience founding another e-commerce startup, Moran joined forces with fellow co-founders Nick Paech and Mohammad Alinia to launch Citrus, which provides retailers with a white-labelled ad platform much like Amazon’s.
“Suppliers can bid in a CPC auction to have their products appear on the front page. It’s basically like buying shelf space but in a digital form,”
– Brad Moran
With a wealth of knowledge and experience from his previous business, Moran admits he had a bit of a “jump start” when launching Citrus, but says he’s still pleasantly surprised at how much the company’s grown.
Less than two years in, the startup has already locked down 20 significant local and international clients, closed a $5 million capital round five months ago, and is in the process of seeking an additional $15 million in fresh capital.
Moran says the company didn’t set out to pursue ‘tier-one’ clients such as Coles or $8 billion British online supermarket Ocado, initially targeting smaller ‘tier-two’ operators.
“We knew tier-one businesses typically liked to do this sort of thing themselves, so our focus when we went to market was the tier-two businesses, that was our sweet spot,” he says.
“But in the end our market timing was perfect, and we started to get a lot of traction with larger businesses.”
“Hundreds” of cold calls a month
– Brad Moran
But that doesn’t mean it was easy going, with the team putting in a lot of hard work to even get across the table from these retail giants.
“We had to hunt them down. They certainly weren’t calling us,” Moran laughs.
“Those companies are always busy, so we had to work our networks and referrals hard.”
The founders and Citrus’ salespeople were cold-calling “hundreds of times” a month to no avail, and said even when they got a meeting, their lack of existing credibility in the market would make the bigger players reluctant to sign on.
“It was mainly a lot of persistence. Once you crack one tier-one retailer, you can typically crack the next two or three,” he says.
“But even then you have to go through the procurement team, the tech team, full auditing. There’s not one hoop to jump through, there’s many.”
Citrus’ $15 million capital raise will largely be devoted to improving business operations, with the company targeting the massive $200 billion addressable market currently dominated by the likes of Google and Facebook.
However, it’s longer-term plans are loftier, hoping to have more than 125 large-scale retail clients by 2024, and with an IPO planned for 2022 once the company hits $100 million in revenue.
Moran says the company runs a “really good” EBITDA thanks to the naturally low overheads of running an advertising business, with the majority of Citrus’ costs lying in customer acquisition.
“We’ve done a lot of hard work to reach this level of product maturity, and this capital injection will really help us scale up over the next five years,” he says.
“We’re an Aussie startup coming out of Brisbane, and we’re competing with Silicon Valley giants and winning.”