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Case Studies
$5 Million Investment in Bootstrapped Refine Labs Helps Company Scale 250%
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$5 MILLION INVESTMENT IN BOOTSTRAPPED REFINE LABS HELPS COMPANY SCALE 250%
Published onDecember 12, 2022
Catherine Daly
Content Strategist
Refine Labs Team, Boston, MA
TIMIA CAPITAL PROVIDED A US $5 MILLION INVESTMENT FACILITY TO REFINE LABS, A
REVENUE R&D LABORATORY FOCUSED ON HIGH-GROWTH B2B COMPANIES. WE CAUGHT UP WITH
CHRIS WALKER, FOUNDER AND CEO OF REFINE LABS, TO LEARN ABOUT HIS COMPANY’S
GROWTH JOURNEY AND PLANS FOR THE FUTURE.
In May 2022, TIMIA Capital provided a $5 million investment facility to Boston,
Massachusetts-based Refine Labs. The investment will help Refine Labs scale its
growth and product development and free up more working capital by replacing its
revenue financing facility.
Refine Labs builds unique revenue strategies and research to help its clients
“stop doing marketing and sales like it’s 2013.” Refine Labs’ philosophy is that
B2B buying has changed, the old structures and frameworks are breaking, and
revenue teams need to start doing what’s best for their company and customers,
not what’s easiest to track.
Validation of the company’s model can be seen in its growth trajectory — in
2019, Refine Labs had $600,000 in ARR; in 2020, it grew to $2 million; in 2021,
it grew to $8 million; and in 2022, it is on track to close $21 million.
WHERE IT ALL BEGAN
Chris Walker, CEO
Chris Walker, founder and CEO of Refine Labs, is not a first-time founder. He
started two eCommerce businesses in the 2010s and took lessons from those
ventures to Refine Labs.
Refine Labs started out as a consultancy where Chris would work with companies
that wanted to try innovative things with their revenue engines. “I had this
weird dream that the biggest, most well-known companies in the world would come
to us to innovate how they generate revenue in the future,” said Chris.
Chris hired his first employee when the company was doing $15,000 a month. “The
hire took us from profitable back to zero again, but I knew that I wanted to
build something substantial, and in order to build anything substantial, you
need people,” said Chris.
The first year, Refine Labs grew from one to four people; the next year, it grew
to 30; and now it has more than 80 people working across its distributed
workforce.
SUPPORTING CUSTOMERS THROUGH A DOWNTURN
Many Refine Labs customers are venture-funded or private equity-funded SaaS
companies. This target audience was arguably the hardest hit in the current
downturn. Valuations have decreased, and funding is harder to come by.
“Today, B2B companies need to operate with lean in-house resources, quickly
identify ineffective programs to reduce costs, make deliberate strategic
adjustments, and focus investments on high ROI activities,” said Chris.
Throughout 2022, Refine Labs went back to the drawing board to understand new
market needs and make deliberate strategic adjustments themselves. The company
is known as one of the best B2B demand generation agencies, but Chris says they
intend to leave the category and pave their own way with “Revenue R&D.”
Refine Labs is transforming from a demand generation agency to a “Revenue R&D
Laboratory” by revamping its entire professional services business, rapidly
accelerating innovation cycles and IP creation, and increasing investments in
product development for its new revenue analytics solution.
> “The combination of intellectual property, analytics tools, and
> experimentation services to deliver a proprietary go-to-market strategy
> clearly separates us from the competition. Customers will have a clear choice
> whether they want a demand generation agency or a Revenue R&D Lab.”
EVOLVING A TRUE SAAS BUSINESS
TIMIA’s investment will help Refine Labs accelerate the development of a SaaS
technology platform to accompany its experimentation-oriented professional
services.
The first product, The Vault, aggregates data and insights collected from Refine
Labs’ programs and experiments conducted at 100+ B2B companies. It then shares a
complete library of objective revenue research and IP to help companies plan,
execute, and optimize revenue strategies with data-backed credibility and
confidence.
There are approximately 30 customers already using The Vault, and TIMIA’s
investment will help Refine Labs accelerate product development to expand this
product to a full Revenue R&D solution over the next three years.
In January, the company plans to announce a suite of new products and services
that help companies adopt and thrive with Revenue R&D.
PIONEERING REVENUE R&D
“I continue to challenge the current reality of B2B “Marketing” and “Sales”,
said Chris. “This traditional organizational structure & division of
responsibilities is failing B2B companies. We are designing and building a new
future for how B2B companies and Revenue Teams operate, including a new category
of Revenue Professionals called Revenue R&D.”
In August, Refine Labs released a new proprietary framework and methodology
called Revenue R&D to provide structure and process for companies to accelerate
revenue growth using the scientific method. The crux of this new paradigm is
that companies should be innovating how they generate revenue in the same way
they innovate with product development.
Revenue R&D is the holistic and scientific process of planning, developing, and
commercializing a pipeline of new revenue programs, in addition to evaluating,
improving, and sustaining existing revenue programs. Just like Product R&D,
Revenue R&D activities focus on building a sustainable competitive advantage,
increasing market share, and creating breakthroughs in revenue growth.
> “As a B2B company, what do you need to do to win today? One, you need a great
> product. And two, you need a great go-to-market. Both of these critical
> imperatives need an R&D function that consistently delivers innovation to the
> revenue team,” said Chris.
BUILDING A WINNING CULTURE
Many startups know that culture is important but find it elusive, hard to
define, and even harder to control. This is not the case for Refine Labs.
Chris and his team understand that a company’s culture is the output of the
people who work there. They carefully thought through and documented the values
they want Refine Labs and its people to champion. So, although Refine Labs has a
distributed workforce, its strong values create a solid culture that attracts
the best talent from around the world.
VALUES SHAPING THE CULTURE AT REFINE LABS
* Be a multiplier: Together, we’re greater than the sum of our parts.
* Strength in diversity: We value our differences and commit to creating an
inclusive environment that fuels our unfair competitive advantage.
* Embrace failure: We succeed, or we learn.
* Play the long game: We think and act to service our long-term strategic
vision.
* A growth mindset: We are energized by the endless pursuit of personal and
professional development.
Refine Labs Team, Boston, MA
REFINE LABS’ FINANCING JOURNEY
When Refine Labs reached $2 million in ARR, it sourced some non-dilutive revenue
financing on a 12-month term. Revenue financing can be a really appropriate
financing strategy for companies that are at a smaller stage. However, as Refine
Labs continued to gain traction, revenue financing became unsustainable as it
removed too much working capital from the business.
“We just reached a scale where revenue financing wasn’t going to work anymore.
Because it is based on a percentage of revenue, the debt repayments were between
$300,000 and $500,000 per month due to our scale,” said Chris.
The leadership team at Refine Labs was not interested in raising equity-based
capital. It wanted to maintain full control over the business model and its
growth.
> “We decided to choose debt over venture capital because we have a unique
> business, and we take a very different approach to our growth strategy,”
> explained Chris.
Chris and his business partner had witnessed multiple instances where the
pressure from venture capital prevented startups from doing the right thing for
their customers and employees.
“We wanted to finance our growth differently and pave the way for how other
companies can do it in the future,” said Chris. “As the business continues to
generate profit and growth, this is a really interesting model.”
Financing with debt over equity also costs Refine Labs a lot less in the long
run. “In 2022, we’ll grow about 250%. Using someone else’s money that we paid
15% on to grow at 250% with no loss of equity sounds like a pretty good deal to
me,” said Chris.
NON-DILUTIVE FINANCING TIPS FROM REFINE LABS
1. Onboard well-suited, profitable customers to bootstrap early growth
2. Use revenue financing to get to a stage where the business is stable (up to
$2 million ARR)
3. Find a suitable term loan provider (e.g., TIMIA Capital) that understands
your business ($2-$20 million ARR)
4. Seek out traditional bank debt ($25 million+)
TIMIA’S INVESTMENT
Refine Labs had advised TIMIA’s marketing team about its LinkedIn advertising
approach. Interestingly, those same LinkedIn ads brought Chris to TIMIA when
Refine Labs required some investment capital.
“Working with TIMIA has been great. The team promised a 60 to 90-day process,
and within that time frame, we had completed the process and had the cash in the
bank,” said Chris.
The debt facility TIMIA provided will help Refine Labs free up working capital.
“We bootstrapped this company, and our expenses have scaled. TIMIA’s investment
will provide a buffer for working capital and help us invest in both growth and
product development,” explained Chris.
Refine Labs is in the process of expanding its revenue and product development
teams to achieve its bold vision.
LOOKING FOR NON-DILUTIVE CAPITAL?
TIMIA Capital works with B2B SaaS and software-enabled
companies between $2 – $20 million ARR.
Get funded
WHAT’S NEXT FOR REFINE LABS?
Today Refine Labs is approaching 100 employees and is on track to hit $21
million in ARR in 2022 — a 250% year-over-year increase — while remaining in
complete control of the company thanks to its smart bootstrapping and financing
strategies.
Chris and his team intend to continue operating a capital-efficient company that
maximizes its growth rate without the need for venture capital investment. When
asked about the end goal for Refine Labs, Chris said, “We are really focused on
how we deliver the right things for our customers. I believe that when you
operate your business as if you’re not going to exit, you ironically end up
being in the best position to exit at some point down the road.”
For now, Refine Labs is focused on continuing to adapt to customer and market
needs, developing its SaaS product, and bringing its Revenue R&D methodology to
companies everywhere.
TIMIA Capital is proud to be helping facilitate the growth of such an exciting
company and is excited to see what lies ahead for Refine Labs.
Check out Refine Labs’ popular Revenue Vitals podcast to hear Chris Walker
discuss modern marketing strategies with today’s top B2B leaders.
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Catherine Daly
Content Strategist
Catherine joined TIMIA Capital as a freelance copywriter and social media
manager in January 2019. She has 15 years experience in marketing and held
senior positions at a number of technology companies including Hootsuite,
Absolute, and Avnet Technology Solutions. Catherine is an expert writer and
marketer and holds an executive Masters in Marketing, a Bachelor of Science in
Communications and Journalism, and a Diploma in Digital Marketing.
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