Mentorloop is no longer your typical startup.
For starters, it’s been operating profitably for more than two years after pivoting the business away from a growth-at-all-costs strategy in response to 2020’s initial pandemic-led funding freeze.
Now its cofounders argue that other founders should look to the “thriving middle” with their business and consider steering towards profitability in lieu of further funding.
As financial runways shorten and the hunt for capital tightens to its lowest level in four years, many founders suffered whiplash when their investors went from a scale-at-speed and hang the expense mantra to demanding they preserve runway and capital, forcing job cuts and a dramatic reshaping of their startups and plans.
Lucy Lloyd, CEO of Melbourne-based Mentorloop said a shift in their business philosophy was not only necessary, but also delivered a more realistic growth strategy. It’s something she believes more founders need to take a close look at.
“As an ecosystem, we need to realise that not every company can be a unicorn and adjust our collective mindset accordingly. Not enough attention or credit is given to the ‘thriving middle’ of our startup sector — companies that have moved away from continually raising funds and found other means to grow,” she said.
“As many founders struggle to find funding, amid the latest funding freeze, we felt it a good time to tell our story as an alternative to the treadmill of fundraising. It can be a fruitless distraction, forcing founders to take time away from building the business, often with little to show for it.”
Since hitting profitability, the company has continued to grow, now working with over 175 organisations globally, including local major brands such as Woolworths, Xero, REA Group, and Monash University.
Mentorloop is an online platform designed to make it easier for companies to run and measure internal mentoring programs. The startup operates on a subscription model, where customers pay a monthly fee for employee access to connect mentors and mentees with precision, and enhance the impact of mentoring relationships. Since launching in 2016, the platform has created more than 40,000 mentorships.
The Melbourne startup raised $725,000 in seed funding in late 2017, banking $1.25 million all up from the likes of Blackbird, Rampersand and Folklore, delivering strong growth metrics subsequently. Since then, cofounder and chief operating officer Heidi Homes says they’ve rethought their focus.
“Since hitting profitability, we’ve gone on to focus on the impact of our business, launching a Community Partner Program, assisting over 58 community and not-for-profit organisations, saving them over $350,000 so they can continue to make mentoring more accessible to those in the community,” she said.
“We’ve also expanded globally, setting up a team in the UK and launching in the US this year. This has all been planned carefully at our own pace, not dictated by the need to hit particular targets for our next round.