Disrupting mobile app attracts more investment

 

Many entrepreneurs can trace their entrepreneurial ambitions back to seeing inspiring leaders or putting together business schemes as a young kid. Not designer Milan Reinhartz, his ‘aha’ moment came when he was working on heavy duty corporate annual reports and Initial Public Offering (IPO) documents.
 

“I became really interested in start-ups and growth companies when I was designing these documents,” he laughs. 
 

At the tender age of 27, Reinartz is the founder of Postr, an NZ-based lockscreen app with almost 15,000 registered users, which pays you for hosting ads you are interested in and serves you personalised content. He runs a team of five full-time staff. 
 

The idea for Postr came in 2013 after seeing similar apps overseas, but Reinartz thought they weren’t executed very well. “I felt like I had the relevant skills and networks and was just waiting for the right idea to come along to make myself independent and build something of my own.”
 

In February 2014, Reinartz and two business partners pulled together $85,000 from their own pockets, a few people from the industry and family. Postr was born. This initial funding provided the base to acquire users and build key advertiser and content provider relationships. No salaries were paid as the team worked to get their idea off the ground. 
 

The Postr app puts personalised content and advertising on lock screens and pays micro-payments to users for hosting the ads. The times-on-site from Postr clicks average between 3-6 minutes and their unique engagement rates are averaging well over 10 percent: facts Reinartz is proud of. “These are numbers that exceed industry averages up to 20-fold, so that’s a real benchmark for us and proof that we are doing something right.”
 

Postr’s big break came when Reinartz went along to a pitch meeting at Angel HQ, the Wellington-based angel (early stage) investment group. His pitch attracted a lot of interest and he raised $500,000 from Angel HQ, ICE Angels (the Auckland-based angel group), NZVIF (the government’s Venture Investment Fund) and some independent high-networth individuals to fuel his business’ growth.
 

He says he started his pitch by quoting a book called ‘Who Owns the Future?’ by Jaron Lanier, in which the author criticises the largest tech companies in the world, including Facebook and Google, who make billions of dollars out of people’s eyeballs. 
 

“It’s interesting because we are paying people for viewing ads,” says Reinartz. 
 

One of Postr’s biggest challenges is the need to acquire users – fast, he says. “Our users want to see more personalised advertising and earn some real pocket money for it. But simultaneously we need more users to get more advertisers on board. 
 

"The half a million dollars we have raised will be used to increase the user base much faster. We’d like to grow from 15,000 users to between 80,000 and 100,000 users by the end of the year.”
 

Reinartz is at pains to point out, however, that it was not just the investment he was interested in, but also the knowhow of some of the angels. 
 

“Given my age and experience, there were clearly a number of areas where I needed help. So I’ve surrounded myself with smart and established industry figures who have expert experience from the field.”
 

The company's advisors now include Grant Maxwell, GM Media of advertising company Y&R Wellington; Dave Allison, ex-PWC auditor and manager at Angel HQ; John-Paul “JP” Randall, Y&R Auckland’s digital director and former digital media sales manager at TVNZ; Hendrik Volp, chief revenue officer at adjust.com; and Adrian von Hammerstein, ex-Cable Germany CEO, now board director of Vodafone Germany.
 

Well-known business names also fill Postr’s board, including David Ackers, who was director of cloud commuting Kiwi success story Greenbutton; Bradley Scott, GM Practice Products at Xero; and Rob Skinner, MD of eGentic APAC.
 

The latest investor-talent to join the company, Stu McMullin, co-founder of Hell Pizza, says angel investors are particularly interested in disruptive companies. “Most companies are competing for eyeballs, yet so many advertising mediums have just become wallpaper, like EDM (email direct marketing) and mail-outs. You’ve got to think of alternative ways to engage customers and that’s why I backed Postr.” 
 

After Reinartz’ pitch at Angel HQ, McMullin says he took him out for a beer. “It’s one thing to back the product, but you really need to back the jockey as well. I thought he’s a good guy and he was really hungry. And that is so important as an entrepreneur.”
 

Today the Postr platform is serving more than 30 mainstream advertisers including Air NZ, Vodafone, 20th Century Fox, Game of War, KFC, Coca-Cola and TipTop Ice Cream. Their content partners include the NZ Herald, GrabOne and MetService.
 

Looking ahead, Postr will shift their focus more towards content, rather than pure advertising, says Reinartz. There are also plans to expand Postr to Australia early next year and Brazil, Indonesia and the UK are also expansion contenders in the not too distant future.