‘Mad Men’: Auckland brand-awareness tracking start-up Tracksuit raises $22m

Tracksuit co-founders and co-CEOs Matt Herbert (left) and Connor Archbold.

For a tech start-up, it’s a bit old-school. Tracksuit was founded in 2021 with the idea of giving smaller firms access to the same brand-tracking tools as big firms at a tenth of the cost. It now has big companies on its books too, like Goodman Fielder and Simplicity KiwiSaver here and Steve Madden in the US.

Its cloud-based tools let you track what consumers think of your brand, and your competitors’ - and help manage your marketing.

The firm, founded by Connor Archbold (36) and Matt Herbert (30) in 2021, has just staged a $22 million Series A raise, led by Silicon Valley-based venture capital firms Altos Ventures and Footwork.

The new investors bought about a third of the company, while at the same time some early investors sold down their stakes. Tracksuit says it has a post-deal valuation of $151m.

Individuals who chipped in included ex-All White and Allbirds co-founder Tim Brown and, from across the Tasman, Bree Johnson, founder of skincare brand Frank Body.

Johnson said her firm was already a user of Archbold and Herbert’s product, and a fan.

But is Allbirds a customer?

“Not yet. We’re working on it,” Archbold told the Herald.

“We’re really proud of Tim Brown [supporting the funding round]. He’s just experienced kind of the problem that we’re solving first-hand. So that’s really exciting.”

Allbrids has lost more than 90 per cent of its Nasdaq value since its listing-day high and has seen revenue slide and losses mount since the Wall Street Journal deemed, in a splashy feature, that it had lost its cool.

Built for life after the ‘cookiepocoalpse’

Archbold wouldn’t comment on Allbirds’ performance specifically, but did speak to what he sees as a general theme of companies focusing too much on “performance marketing” which in recent years has been driven by in large part by browser-based cookies - or tracking software that monitors what active customers click on and buy, and where they go on the web, then serving them ads based on that behaviour.

“Any brand that grew up during the digital era probably paid too much attention to performance marketing and not enough to brand and awareness,” Archbold said.

“Brands got to dizzying heights through performance marketing and then as performance marketing, but then as it gets more difficult and expensive, they don’t have the brand and awareness to fall back on.”

“Everyone got really good at focusing on the 5 per cent buying right now and forgot they have to build brand love with the 95 per cent who aren’t.”

With new privacy protections from Google and others blocking tracking cookies, companies are "looking back at old-school marketing science, like the Mad Men days, and saying 'let's go back to that'," Tracksuit founder Connor Archbold says.

“Now that we have the ‘cookiepocalypse’ [a seismic industry change that has seen Google move to phase out third-party cookies, as a privacy measure], performance marketing is hitting less. You can’t build a billion-dollar business with performance marketing anymore,” Archibold said.

“People are looking back at old-school marketing science, sort of like Mad Men days, and saying: ‘Let’s go back to that. Creativity is awesome. Let’s emotionally connect.’ But they have no way to track that emotional connection. Tracksuit fills that gap.”

Scar tissue

Tracksuit tripled its revenue for each of its first two years and hopes to double it this year. Revenue from monthly subscriptions is currently running at an annualised rate of $10m, Archbold said.

They would be cashflow positive in about 18 months, the founder said.

The firm was bootstrapped and financially self-sufficient in its early days, he said - emphasising that although it’s fast-growing, the founders have always followed something of a conservative ethos.

“Matt and I both have a lot of scar tissue from earlier start-ups where we weren’t so conscious of being efficient. So we started the business to be as efficient as possible and to make sure we never got into that position of needing to raise money to keep the lights on.”

Tracksuit could be cashflow-positive today but preferred to push for expansion. Staff numbers had tripled to around 65 over the past year, in offices in New Zealand, Australia, Britain and the US. Archbold anticipates that will grow to about 200 over the next 18 months as the new funds bankroll a push to expand the firm’s business in Europe and North America.

Tracksuit staff in December 2023.

In its early days, Tracksuit was backed by the venture wing of market research firm TRA and brand-focused venture firm Previously Unavailable (which both retain small stakes).

A $7.5m seed round in early 2023 was led by Australasian VC firm Blackbird, which invested $4m, and was supported by Icehouse Ventures, Ascential and Shasta Ventures - all of which also contributed to the round just closed.

Tracksuit was drawn to Altos and Footwork for its Series A raise for their US contacts and networks, and experience with rapidly growing businesses. The Wall Street Journal reported that Altos invested US$400m ($650m) in gaming platform Roblox during the firm’s early days - a stake worth US$8.5 billion by the time of the firm’s 2021 IPO.

“It’s great to have people that have been there and done that and grown large businesses,” Archbold said. They have that large-scale attitude and experience that can help us set that vision. Kiwi companies always struggle with that.”

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.