Hackernoon logo10x Growth in 7 Months: How we Invest by Developing Software by@nikitadigis

10x Growth in 7 Months: How we Invest by Developing Software

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Nick Nagatkin Hacker Noon profile picture

@nikitadigisNick Nagatkin

CEO, Co-Founder at Digis, and Managing Partner at Richelieu V.

For non-technical founders of early-stage startups, it is quite difficult to find a person or a team to develop their initial documentation and MVP. If you’re like most of today’s startups, an app is a critical part of your journey.

Because Technical Co-founders are in great demand, you should have something to catch their interest — an MVP to show or a satisfying cash reward. Since the second variant is rare, you come to several ways to start: no-code tools, learn how to code by yourself, or partner with a development team.

Digis is an international software development company. Our mission is to raise unicorns from startups. It means we not only develop software, but also help them with business strategy, and provide access to our global network of mentors and industry experts. In addition to its services, Digis offers cash investment, where the opportunity is seen as promising.

When we invest in our startup clients by various means, the principle is simple: we will only earn money when the company earns profit.

One of our recent success stories is Raters — a UK-based movie recommendation platform and a social network. With this app, you get personalized movies your friends have watched or are planning to watch in the future. When you find a movie, you will also see feedback from your Raters friends and where to watch the movie online.

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Our partnership

We started working with the startup at the end of 2018. Raters found us on Upwork — they needed a team for development. At that time, they had an iOS app and a backend. Initially, Raters worked only with our backend developer and designer. In the process, they began to attract new team members. Under tight deadlines, we have successfully released the android and the web application, which only strengthened our relationship with the company. Finally, the team consisted of 10 people: project managers, android, web, and backend developers, designers, SEO, DevOps.

Raters also began to make recurring requests that were not related to the technical part, and we, in turn, were interested in their future plans. The Digis team was actively involved in shaping their strategy: how they will be advertised, how they will be promoted, which markets to enter, which features are in priority, how to effectively search for developers effectively in order to strengthen the internal team. We also help them find investments.

The app is now growing with organic traffic through SEO, which we co-developed and implemented with them.

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And the App Store optimization was done by a contractor that we recommended to them.

We negotiate investments by our work

With the pandemic outbreak, Raters realized they were running out of funds to keep developing. However, it was obvious that if they continued to develop, they would have a significant increase in their active userbase, who, due to the quarantine, began to spend more time on entertainment platforms.

What's more, Raters was in the process of fundraising and needed a reliable business plan with a finished product that could be shown to venture capitalists.

The Digis leadership saw the potential of the Raters and wanted to help. We agreed to develop the app further in return for equity. Thus, we became their partners and co-owners. It was the starting point for our even closer interaction and more active participation in their business.

Over the next 7 months, we developed a web version of the platform and improved the mobile application.

Outcome

After another round of investments in January 2021, Raters have grown 10x since July 2020.

Raters Group was advised on their funding round by growth advisor Small Harbour. Malachy McDonnell, founder and director at Small Harbour, commented: «We were delighted to support the strong team at Raters. Together we hit the key requirements to attract funding:

1) a strong solution to a clearly identified market opportunity; 

2) a compelling case within the strategy already underway and 

3) a well-prepared business plan with a precisely articulated storybook as to how the investment would be applied to deliver increased value for investors. 

We connected Raters to a robust database of qualified investors, amongst whom both the opportunity and EIS qualification generated significant appetite and we completed the funding within our timetable.

Raters management intends to use the attracted funding to further develop their platform, scale their user base, and even considers filing for a patenting of their app movie recommendation algorithm in the USA. During the first month after the fundraising, Raters MAU has organically increased by 363.5%.

Digis continues to work with Raters on the strategic side: we are engaged in project management and consulting. In May 2021, the board of directors of the startup will be created, we will enter and will participate in the affairs of Raters even more actively and in more detail, help them raise the following round of investments.

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