Maybe four million is becoming the magic number for GutCheck, a Denver-based startup that develops online market research tools for companies launching new products and marketing campaigns.
GutCheck recently closed a $4 million Series C round, which comes on the heels of a $4 million Series B round the company closed in June. GutCheck has raised a total of $10 million, co-founder and CEO Matt Warta said.
Icon Venture Partners led the round and is a new investor. Grotech Ventures, Crawley Ventures, Highway 12 Ventures, and Village Ventures also are GutCheck investors and participated in the round.
Warta said Icon approached GutCheck with an unsolicited offer, although Warta knew people at the firm, which had been keeping an eye on the startup.
“They followed our progress since the beginning, and they had in their mind what the company needed to look like for them to be an investor. When they saw that, they reached out and said, ‘Hey, we think you’re ready, and we’d like to invest,’” Warta said.
A look at GutCheck’s clients gives a hint as to why Icon liked what they saw. It includes consumer products powerhouses like Procter & Gamble, major retailers like Home Depot, and restaurant chains like Subway.
GutCheck’s software gives the brands the ability to identify customers and potential customers online and to recruit them into a virtual focus group, based on the demographics a company is interested in, Warta said. Companies can use GutCheck to survey these groups and conduct one-to-one online chats.
Warta said GutCheck’s major assets are speed and affordability. Where it used to take weeks or even months for large companies to get feedback about product launches, GutCheck can now deliver the same quality of feedback in days, he said. GutCheck is able to do that because it has automated the cumbersome process of creating a pool of people to survey.
Another type of speed is on GutCheck’s mind at the moment, and that’s its own rapid growth. It will use the money to add to its sales, marketing, and engineering teams.
“We’re definitely in the right place at the right time, and we just want to press on the gas hard,” Warta said.
He said GutCheck is in a promising position because a lot of companies are dissuaded from consumer research because of the cost or time involved in setting up study. Warta said research shows only about 1 in 10 companies incorporate input from existing or potential customers.
“We are giving them a platform where they no longer have an excuse not to get consumer feedback,” he said.
