How to close enterprise-level deals and strategic seed investment in <15 months?

?? NEWS ??  

Lupa Technology, a startup from Katapult's second cohort (2023), announced last week that they had closed the $1.5M Seed round of investment with South Central Ventures. 

By getting the investor's vote of confidence, Lupa Technology now has the right to obtain the remaining co-investment grant from Katapult. The co-investment grant does not dilute the equity of the Founders. 

We interviewed Vladimir Milovanovic, CEO and Co-Founder of Lupa Technology, to understand their decisions since they enrolled in the "Katapult Akcelerator" program 15 months ago.        

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Note: this interview was produced in July 2024. As startups are likely to pivot and change, consider reaching out to startup Founders for the most recent information on their stage/growth/results achieved so far.?

#1 What is Lupa Technology? What is the problem you solve?

At LUPA Technology, we have created an AI-driven data intelligence platform for the construction industry. Our platform converts unstructured documents into critical insights for project controls and evidence for claims and disputes in construction.

#2 How did Katapult impact your business?

I would say that there are two major components that Katapult brought to our business. One was the introduction to investors and Venture Capital, and the other one was the mentorship and consulting that we were able to obtain from leading experts who came through The World Bank and European Commission Program with extensive backgrounds working in companies such as McKinsey & Company and Boston Consulting Group (BCG) to help us transform our business. Maybe the final third point would be Lupa being able to come out of the cave and start communicating and talking to other companies in the startup ecosystem, not only in Southeast Europe but truly globally.

#3 Why do you say that "speaking the same language" is crucial in closing the Seed round with your investor?

We have been extremely fortunate to have been able to find South Central Ventures, and I would say the number one reason why we partnered together on this venture is the fact that we speak the same language. I believe speaking the same language is the most important thing in business. South Central Ventures comes as an out-of-the-box thinker addition to our team, and with them, they bring very strong institutions, such as EBRD, European Investment Fund (EIF), and others that give proper validation and credibility to the business that we're in.

#4 How did participation in Katapult raise your company's credibility with your customers?

Construction industry is, first of all, extremely conservative, and the combination of construction and legal is even more conservative. Everything rides on trust, integrity, and risk management. Lupa provides a solution to construction companies that facilitates the management of project errors and risks and potential claims and disputes. The fact that Katapult and South Central Ventures came on board and gave us the support of the World Bank, European Commission, EBRD, EIF, and organizations such as those gives great credibility to our clients about the quality of our solution.

#5 How did Katapult help you understand that you should target Enterprises instead of SMEs?

Katapult's input into our sales process was also transformative in the sense of which clients we started targeting. Initially, when we kicked our sales into the fifth gear, we were targeting SMEs, and small and medium enterprises because it was easier to get to the decision-makers, explain to them the benefits of the platform, and sell to them what we call Project Licenses. What we have learned through the process is that we can equally fast sell project licenses to big companies and allow ourselves time to scale within the companies to get to the Enterprise Licenses or let's say multiple project licenses that will support their business across the portfolio of their projects, which was not possible with SMEs because they would typically have one or two projects that they would be running simultaneously.

#6 What is the difference between the ticket size of SME and Enterprize in your case?

We started the Katapult program last year and we made some initial sales to global leading companies such as Dentons, Bloomberg, Ballast Nedam, Diales , and others, and I'm extremely excited to say that this year we have made that circle and we are now starting to close enterprise licenses with these clients. We started selling to large companies only because we saw the benefit of the ability to sell project-based licenses, think $50K-60K deals, and upsell within these companies to tackle a portfolio of their projects to our enterprise license deal, which is, let's say, around a million dollars.

#7 How did the demo of your platform change due to the program?

I would say before the Katapult program, our demos were not structured. We did not have a prescription for our sales and the application demos were too long. Fast forward to after the Katapult program, we now have a prescribed process of sales. We have a prescribed demo process as the follows: First of all, we need to know what the client's pain points are so that we can decide which areas of the platform we will show to them. The second thing we have learned is that people better engage with their own data. Doing demos on our anonymized data sets is not as exciting as doing demos on our client's data sets because they will immediately know what the issues are, and they will look for a solution for their pain points directly during the demo. It's almost like a proof of concept and it ensures a much better sales process than what we used. eing in the niche and being domain experts in construction kind of impeded our sales process in the sense that we focused too much attention on various aspects of our platform, which made, I would say, our presentations tedious and too long.

#8 What are the top 3 things you learned from other startups in the cohort?

Present to investors and clients: What we have learned at the Katapult program from other companies is how well they can distill the key values when presenting their products, what type of visuals they were using, and how their pace changed throughout the presentation. So, one of the things I would say we have learned from the ecosystem is how to better present our company, whether to the VC investors or to our prospective clients.

How to set up sales: Another thing that we have learned from the companies who joined the Katapult program, especially companies who have been in sales longer than we have, because remember we started our sales literally as we joined the Katapult program, was the pitfalls of the sales process and we've learned from other companies what works and what doesn't work.

Due dilligence process: One more thing is that many of them have been in the investment game longer than us, so they took certain steps that we have taken later on, and they selflessly guided us through the process by telling us about the due diligence process, for example, what you need to prepare for in order to have a successful fundraising round.

#9 Why were you afraid someone would steal your idea before Katapult? Do you still feel the same way?

When we started developing our platform about four years ago, we knew that we were onto something really big and something very smart. so we were afraid to talk to people that we didn't know well for fear of somebody stealing our technology if you want or reverse engineering our solutions and things like that. It took us some time to learn and also to advance our platform to a point where we could openly talk to people and Katapult was truly us coming out of the dark after several years of developing this product for the first time. It was the first time that we presented our product to a wider audience, businesses, investors and other startups as well.

Nobody has taken our idea. I think the solution is so complex because the problem is so complex that we're still kind of the only ones.

#10 Your memories of raising investment round are still fresh. What would you advise startups who are just preparing to start?

Traction trumps everything: Our suggestion would be to make sure that your sales process is in place before you go and speak to the investors. Sales traction trumps everything. Ideas are great, even if you have a good product, sometimes that is not enough. You need to know how to sell your product and then you will get the right attention from the investors.

Read the fine print: Investment contracts are extremely complex and very voluminous documents. You have to stay focused on the fine print, try to understand as much as you can, and not give up key positions.

Don't undervalue your business. When talking to investors don't undervalue yourself. Investors are investing in your company because they have seen the opportunity to make more money through your business.

Maintain contacts you build. When raising seed round investments you will be talking to a lot of investors. For example, we have spoken to over 20 different Venture Capital companies and Angel investors. You will learn that not everyone is right for you at this stage but it's important to maintain those contacts as we had experienced that over half of the people we have spoken to told us that they want to stay in touch for the series A investment.

About the program:         

The Кatapult program of the Innovation Fund (Fond za inovacionu delatnost) is the first valid acceleration program in Serbia, combining intensive, three-month mentoring with co-investment. Katapult is a part of the SAIGE Project, built on a decade of successful cooperation between the Government of Serbia, the European Union (EU u Srbiji), and The World Bank, to bolster innovative entrepreneurship and scientific research.