Take a look
Entrepreneurs can take inspiration from the unlikeliest of places. For Metail co-founder and CEO Tom Adeyoola, it was his wife’s online shopping experiences, and a trip to Vietnam. Frustrated with the online fashion retail experience, and having fared little better on the high street, Tom’s wife had some garments tailor-made while on holiday in Vietnam.
This led him to the idea behind Metail: why not use computer vision technology to bring a more bespoke experience to buying clothes online?
Metail’s MeModel Experience allows female customers to create a 3D model on fashion retail websites, which reflects their size and shape with over 90 per cent accuracy. They can then try on garments virtually before ordering. More than 7 million women have created a MeModel to date.
Tom initially raised money from friends and family back in 2008, combining this with his own funds to deliver £60,000 of working capital with which to set up Metail. Begging favours and working for free where he could, and supplementing his income with consultancy work, he managed to generate the £200,000 of value needed to take the business to the next stage.
He then raised £450,000, £1.2 million and £2.6 million from successive angel rounds. This took Metail to a private beta launch in 2011, and a full launch the following year with its first commercial partner: Clothing at Tesco.
An unexpected A-round
Metail raised its series A funding at a time when Tom wasn’t actively seeking finance for the business. While working to grow the firm’s Asian footprint, Tom built up a relationship with the CTO of TAL, a Hong Kong-based clothes manufacturing giant. At a meeting with Metail’s CFO, TAL offered to invest in Metail. It was a situation that worked to Tom’s advantage when it came to negotiating terms.
“The fact that we weren’t looking for money meant we could set out the terms under which we’d consider taking investment,” he explains. “As a result, the A-series proved to be our quickest and easiest funding round.”
A $12 million investment was led by TAL, with participation from several angel investors. It was completed in just three months. Metail has since raised series B finance totalling £10 million.
A matter of milestones
Tom has now experienced the fundraising process several times over, with several start-ups. He warns against judging progress by which round you’ve reached, and taking your eye off the business. “Success isn’t defined by funding rounds,” he says. “It comes down to reaching the next commercial milestone, then the next, until you’re an established business.”
So stay focused on those goals, is his advice. Be clear about what the next one is, what you need to do to get there, and the funding you’ll need to achieve it. But remember – it’s easy to be over-optimistic. “The money rarely lasts as long as you expect,” Tom cautions.
When it comes to raising funds, his advice is three-fold.
- Firstly, don’t underestimate how much work is involved, and how disruptive it is. “It’s time-consuming and exhausting,” affirms Tom. “And it takes you out of the business for several months, during which you’re not moving things forward. So when the money comes in, you’re already behind the curve.”
- Secondly, be open. Get out there and talk to as many people as you can. “Put yourself in the way of opportunities. Initiatives like the Business Growth Programme are there to help with that.”
- And finally, think strategically about who you take discussions forward with. “Don’t spray and pray,” Tom warns. “Take smart money: investment from people with the ability to help you scale your business, operationally and commercially. “Look for partners who can bring strategic value as well as finance; people who’ve done it before in your space, and so understand the value your business can create.”
Download this report, which outlines everything you need to know about business finance for start-ups, draws on the expertise of the mentors from London & Partners’ VC Club and its Business Growth Programme, who help London’s early-stage businesses unlock their potential and overcome growth barriers.