Odds-on outlay by Faster Horses

Marketing and consultancy firm Faster Horses has secured a stake in US-based startup UBDI (Universal Basic Data Income), to aid the research and data firm in its Australian expansion.

The deal, completed earlier this year, comes as startups, small businesses and tech companies struggle with a squeeze on capital, with investors looking to minimise risk amid the COVID-19 pandemic (see page 49).

Founded in Washington, DC, in 2018, UBDI provides businesses with anonymous data aggregated from individuals who sign up through the company’s mobile app in exchange for credits and direct payment.

As part of the deal, Faster Horses has invested $365,000 in UBDI, as well as an additional $200,000 into UK-based digi.me, the intermediary that allows users to remain anonymous while using the app.

Managing director Veronica Mayne, who co-founded Perth-based Faster Horses in 2014 alongside Peter Fairbrother, said the company chose to invest in UBDI because its research was broader and more comprehensive than that undertaken by most traditional, panel-based research firms.

She said the app’s accessibility and ease of use, coupled with its ability to track data points such as a user’s health, social media status, spending and location, would give clients a better understanding of the market.

“If you want to build a new product, you have richer data in terms of the people who like the product,” Ms Mayne said.

“It gives you such a rich ecosystem that you can build into a persona of your potential customer base and allows you to be far more accurate in your marketing.”

Faster Horses' investment came before recent difficulties for startups and investors arose, with UBDI shelving plans for a single capital raising in favour of seeking funding through a series of smaller raisings from pre-seed investors.

Though Ms Mayne cited the pandemic as the major reason for this, she said Australia’s investment community was generally risk-averse, and startups factored that in when seeking funds.

“We’ve spoken to other startups, and everyone talks about how hard it is to get money here,” she said.

“The US is much easier; they have a higher risk appetite, and businesses don’t mind putting their money into things they think could turn into the unicorn everybody wants.”