Pictured above: Matt Butler promoting KEA Outdoors.
KEA Outdoors is a plucky young brand out to succeed in the highly competitive global outdoor equipment market. Founder Matt Butler has enlisted a dedicated crowd of backers, most recently via equity crowdfunder PledgeMe, in order to achieve his company’s ambitious targets.
When NZBusiness caught up with KEA Outdoors founder Matt Butler in late May, his three-year-old start-up was just days away from closing out a month-long equity crowdfunding campaign on PledgeMe. He was confident of at least reaching the $250,000 minimum target.
Matt has every reason to be confident when it comes to raising investment funds.
KEA Outdoors, his fast-growing outdoor equipment brand is built on Kickstarter campaigns. The Wanaka-based company has grown swiftly and now supplies its edgy outdoor equipment to more than 50 countries worldwide, with a considerable market presence across the US, Canada, Australia, and New Zealand.
Leaving home at age 16, the now 33-year-old had wasted no time in building a business career. Describing himself as “independent, ambitious and somewhat rebellious, and after burying his head in numerous books on business careers and investing, Matt admits to always having an “innate feeling” that business was his life’s calling.
His first venture presented itself when he was still a teenager. Matt’s Dad had visited the United States and noticed the proliferation of DVD kiosks in North America. It was an opportunity waiting to happen in New Zealand and Matt pounced on it.
“I found a company in Canada that sold the kiosks, raised some funds from my parents’ friends, bought five machines and started calling on Auckland supermarkets.”
Not one to stand still, Matt eventually grew bored with the business, found some investors to buy out the bulk of the company, and after travelling for a year, found himself fishing in Wanaka.
“The day I moved to Wanaka was the day Netflix launched in New Zealand,” he recalls.
It would prove to be the beginning of the end for the video industry and Matt was glad to see the back of it.
A cautious approach
For Matt, succeeding in business was never about putting all eggs in one basket. He often utilised Kickstarter to identify novel products that he could acquire the local distribution licence for – the PowerCube extension lead being one such example.
Matt had also quickly developed a strong understanding of New Zealand’s wholesale/retail distribution market. It was another string to his business bow.
Five seasons spent as a fishing guide in the US for American clients ended with the arrival of Covid, but Matt had accumulated a number of American clients and contacts, which would come in handy for building his KEA Outdoors brand there.
He had the marketing experience from his DVD kiosk business to drawn upon, as well as the content creation abilities from his time as a fly-fishing guide.
“The DVD business had also given me a good feel for operations and finance,” says Matt, “which was useful whenever my board drilled me on finances.”
Matt approached his KEA Outdoors business cautiously – refining his business story as he progressed and building trust in his product. He knew all about the pitfalls of a business in the first few years, which is why he personally pre-funded KEA Outdoors to begin with and used Kickstarter. Thanks to his American contacts he raised $25,000 in the first day and $300,000 across 30 days, representing a lot of products.
It was the second most successful launch ever on Kickstarter in the Design category.
“Telling your story is so important,” explains Matt, “and how you design your comms and marketing around it to build your community, and the crowd associated with it, before you launch on Kickstarter.
“I spent six months before each campaign launched talking to people, running the marketing, comms, emails and ads, so that in the first few days we got a really big boost.”
Spreading investors, applying lessons
Today, with investments from just $1000, crowdfunding through PledgeMe is the perfect way to raise capital for the business across a larger spread of investors, and it allows you to retain a greater amount of equity within the business, believes Matt.
The key is to have a compelling business story.
He admits that 2024 is a tough time to be raising capital, but his previous successes over the years helped make the decision to run with PledgeMe that much easier.
Matt’s track record in nurturing and building an international business has made him well qualified to advise other startups on their fundraising journeys.
He says your first experience is always the hardest, because you don’t know your parameters – how much to allow for marketing, shipping, duties and taxes. For example, he remembers being caught out on much higher-than-expected duty when sending goods from a US-based 3PL distributor into Canada.
Shipping delays have also been a “constant nightmare”, adds Matt, “starting with Covid when all the factories in Thailand were shut down.
“Missing deadlines because of those delays has always been tricky to deal with.”
With 70 percent of all KEA Outdoors sales overseas, Matt’s best tips when building an international business include:
- Never over-promise or under-deliver to anyone.
- Make sure you’re aware of all shipping and delivery costs.
- Rather than attempting to work with a factory direct, consider partnering with a manufacturing agent, particularly around design.
- If you are manufacturing in China, ensure you visit the factory as soon as you can. It gives you a good feel for how and why things are made the way they are. But be careful to always provide clear instructions.
Drawing on the experts
In typical DIY fashion, Matt would often first sketch his idea for a new product on a piece of paper. “I drew the KEA Kit, my first product, on a notepad in bed one night during Covid. Then got my cousin to convert it into 3D. It took about six months to get it perfect, because I didn’t have a clue when it came to materials,” he recalls.
One of the outcomes of the crowdfunding campaign has been the hiring of a Wanaka-based lead designer to help build up a product roadmap and encourage repeat sales.
Making real progress
To date KEA Outdoors has been largely an e-commerce B2C business with around 95 percent of sales conducted online. 2024 has seen a major push into the wholesale market, and there are ten retail stores in New Zealand and four in Australia carrying Matt’s product, with that number expected to quickly grow.
“Building up the New Zealand and Australian sales is our major focus this year,” says Matt.
Like clothing, outdoor equipment will always be popular in a retail environment, he adds, and anywhere in the world. “People like to visit retail stores and have a look around, and that’s why we always ensure our gear is consistently well-placed and grouped together in store and displayed in the right manner.”
In terms of planning, the goal is to continue building product lines vertically, maintain a focus on middle market, high quality products, and eventually branch into categories such as Kitchen, Sleep and Shelter. But that won’t be at the expense of the core range, explains Matt.
“The better we do our core range, the better the effect on any new products. It’s all about ensuring every product complements everything else and makes sense.
“At the end of the day, it also has to represent value for the customer.”
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