Earlier this year Gamurs, a social networking site for gamers, managed to raise $20,000. It may seem like a small amount to many companies but for an early stage startup which is bootstrapped, living on noodles and the kindness of others, just a few grand can be the difference between taking off or hitting the dirt.
That extra bit of cash took the startup’s total funds raised to $50,000.
Today though, the company has managed to land $350,000 in seed capital and founder Riad Chikhani is pretty relieved.
“It dragged on,” he told Business Insider, adding that the startup, which is currently based at Fishburners in Sydney, had the money committed in the first few days but it took a while to close the deal.
“We had about two or three months left, it wasn’t too close but it was a bit too close for comfort.”
The capital the group of investors injected has given the startup a little more time to build out the platform and grow its user base.
Gamurs came out of the Slingshot program, where it secured its first $30,000 of external capital. Chikhani said the accelerator taught him and his now team of eight to think about what the customers’ issues are and build for them — not for themselves.
Chikhani said he allotted 2% of the company in return for the $20,000 in January which extended the startup’s runway by about four to five months.
He claimed the most recent investment was done on a $3 million valuation, whereby $330,000 was given in return for 11% equity.
Chikhani thinks the latest funds will last the company between 16 and 18 months but it’s also looking at getting its own office space so the burn rate may increase.
“It’s never really complete, you’re always looking for more money,” he said.
As for growth, the startup is acquiring between 50 and 60 users a day and currently has about 3,500 using the platform. Chikhani said the team is going to focus on building out the product and is considering a white label version where companies can host their own groups.
A former UNSW computer science student, Chikhani came up with the idea when he was a teenager. He admits back then he would wake up at 5am, before school, to play games. At 14 years old, he was gaming for between 40 and 50 hours a week.
But he was a bit of a closet gamer and couldn’t find a platform which indulged his need to talk about the games he was playing.
“I didn’t want friends to know how long I was spending gaming – Facebook wasn’t the right platform,” he said.
Now with a startup to build, his gaming hours are slightly reduced to up to ten a week, reserving the reduced amount of screen time to his two favourites: Skyrim and FIFA.
But it’s these high levels of engagement which Chikhani hopes to tap into with Gamurs.