‘Unicorn’ Culture Amp hiring again after tough 2020

Australian ‘unicorn’ tech start-up Culture Amp has shrugged off a difficult 2020 and has resumed hiring

Culture AMP Co founder and CEO Didier Elzinga. Picture: Sarah Matray

Australian ‘unicorn’ tech start-up Culture Amp has shrugged off a difficult 2020 and has resumed hiring, with chief executive Didier Elzinga declaring the company is in a ’sweet spot’ amid changing workplace conditions, but isn’t year ready to contemplate an IPO.

Culture Amp, which was most recently valued at $1bn, was last year forced to cut 8 per cent of its workforce, with COVID-19 providing a rare stumbling block for a company that was previously accustomed to rapid growth.

The company’s most recent financial results filed with corporate regulator ASIC show that its losses grew for the year ending June 30 2020, with the company posting a net loss of $33m, from a $27m loss a year earlier, but its revenue was up 64 per cent to $45m from $27m a year earlier. The company also reported $67m cash on hand, from $16m in 2019.

Founded in 2009, Culture Amp produces software for companies to ­collect and understand employee feedback, and Mr Elziga said 2021 was proving a pivotal year for his tech outfit.

“The workplace is changing and things aren’t going backwards,” Mr Elzinga said. “There’s been a big change, with remotely distributed workforces, to a whole range of issues and conversations that we weren’t having before in the workplace.

“It’s not gonna be easy but we see a huge opportunity for us to be at the heart of helping companies navigate those questions and those challenges, as we pull the handbrake after last year. We’re looking at a year now where we can’t hire fast enough.”

According to Mr Elzinga, the last 10 to 15 year have been around technology and embracing digital, while the next ten years will be about embracing people.

“If you don’t you’ll struggle and get left behind,” he said. “And we want to be the platform that underpins that so. The last year has, I think, brought that to the forefront and really demonstrated our mission of creating a better world of work. Its time is now. And at the same time I think the last year made everyone realise just how complicated this problem is, and it’s not like there’s a playbook for it.

“There‘s a lot of stuff we’re working out together. And the challenge for everyone in the world of work at the moment is, how do we keep looking after people in the workplace? Because it’s not over yet, and people are struggling and are burnt out. The next 12 months will be very interesting on that front.”

Culture Amp‘s chief financial officer Sally Bruce, a former AMP and NAB executive who joined the company last year, said that all businesses for much of 2020 were ‘holding their breath’ during the pandemic and that had hurt Culture Amp in the short term, but the company was thrilled with how it had closed out the year.

“We have really strong growth now that a lot of people are operating with absolute certainty,” she said. “People were always the most important part of companies but one that is front and centre. And we‘re in a really sweet spot.”

The company now has 3500 customers and has hired 90 people since the start of 2021, Ms Bruce said, but was in no rush to go public and launch an IPO.

“The revenue growth continues to outstrip our expense growth, and in fact over the last five months we’ve been cashflow positive. That’s about growing our revenue as aggressively as we can while meeting customers’ needs and maintaining a high quality product. Over time those things will create a different financial dynamic for us, and we’ve been thrilled with how things are going,” she said.

“We have plenty of cash at the moment. We’ll be opportunistic about, you know, where the markets are at and we keep an eye on them, but there’s no compulsion for us to IPO at any point at the moment.”