Non-profits spend ~$150B annually on outsourcing marketing functions because great marketing campaigns can encourage thousands of people to volunteer, donate, and further support the cause and most nonprofits don’t have the resources to support in-house hires. Seeing this vast opportunity, Wethos has built an agile marketplace that allows nonprofits and mission-driven brands to engage creative marketing specialists. There are over vetted 4,000 specialists in the Wethos network that can help with a range of functions including executing digital strategy, content creation, website development, brand strategy, and more. Wethos is already trusted by companies like charity: water, Casper, and Covergirl.
AlleyWatch caught up with Cofounder and CEO Rachel Renock to learn more about the company, its expansion plans, and recent round of funding, which brings its total funding raised to $4.6M across four rounds.
Who were your investors and how much did you raise?
Wethos just closed an oversubscribed seed round of $3M, led by Laconia Capital and including Flybridge Capital, Brooklyn Bridge Ventures, Loup, SAP, Corigin, Propel, Higher Ground Labs, Valuestream, Overton, The Fund, GreenEgg, and Outbound.
Tell us about the product or service that Wethos offers.
Wethos deploys responsive teams of creative, marketing specialists to help brands stay competitive in a rapidly evolving digital landscape. Through a proprietary tech platform and diverse community of vetted professionals, Wethos curates flexible teams of exactly the right experts to help companies and causes accelerate progress.
What inspired you to start Wethos?
We are ex-advertising executives, who were frustrated with a work environment that encourages competition and individualism over the power of collaboration.
How is Wethos different?
Unlike big agencies with siloed departments, expensive overhead, and opaque pricing, proprietary technology enables Wethos to rapidly scope complex work and curate teams based on each customer’s unique needs.
What market does Wethos target and how big is it?
Wethos started in a unique market from the start: nonprofits, which spend about $150B outsourcing. As time went on, we began getting more and more inbound from companies who wanted to tap into our agile solution, this new round of funding will help us accelerate our market penetration across all sectors.
We use a proprietary in-house pricing engine that enables us to scope complex work quickly. Unlike a traditional agency, we don’t bill by the hour, we use a points system that determines the price based on complexity, uncertainty, level of expertise required, and estimated amount of time. We have a 33% take rate on the total contract value, which is exponentially higher than a regular marketplace but exponentially lower than a traditional agency markup which can range anywhere from 100-500% markups.
How has the business changed since we spoke last year?
Since we launched Wethos Teams in 2018 we’ve been predominantly focused on creating scalable solutions for complex scoping and resourcing/assembling teams through our in-house technology. This year we plan to roll out more external interfaces to give clients their own Wethos Teams accounts, project dashboards, automated onboarding, and streamlined billing.
What was the funding process like?
This round of funding came together much faster than the last round, we raised the full $3M in 90 days and were oversubscribed by the time we closed. I ran a very different process this time around that was much more strategic and mirrored a good sales process more than anything. Our lead investors I’ve also known for 2 years, I never expected them to invest when we were a traditional marketplace but when I sat down with them to walk through our new solution and offering, they were hooked. I’m super grateful to have investors that I already trust leading the round.
This round of funding came together much faster than the last round, we raised the full $3M in 90 days and were oversubscribed by the time we closed. I ran a very different process this time around that was much more strategic and mirrored a good sales process more than anything. Our lead investors I’ve also known for 2 years.
What are the biggest challenges that you faced while raising capital?
Wethos doesn’t fit neatly into any category, so it was challenging to get investors to think outside of the box of categories that they’re used to i.e., marketplace or SaaS. The investors who joined us were ones who could see the value of our platform and were less concerned about what we label ourselves. A lot of investors say they’re looking for innovative companies that break patterns but 9/10 times when a company breaks a pattern, they get skittish. I’m thankful for the investors who joined our round and their ability to see beyond what we’re used to today.
What factors about your business led your investors to write the check?
I can’t speak for the investors, but I believe it was a combination of our extremely fast growth in the past year, the technology we built is scalable, and the founding team’s extensive background in freelancing and ad agencies.
What are the milestones you plan to achieve in the next six months?
We plan to grow exponentially over the next 6 months as we roll out additional high-fidelity experiences for our clients and teams, which will bring a new layer of transparency to our premium services. With a traditional agency, you have to call up an Account Manager or email someone to get an update or information on what’s going on, so our new solutions empower people to be in the know and enable our Account Managers to spend more time on strategy, and less time on tedious admin.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on sales and generating revenue for your business as much as you can. Before this round of funding, we were only a team of 6 and we sold 100+ teams and did $1M in GMV in a little over a year. As a founder, there are two ways to make sure there’s capital in your bank, you can sell a piece of your company for equity, or you can sell your product and service for revenue. Whenever possible, choose revenue, control your own destiny.
Where do you see the company going now over the near term?
Today, we’re a tech-enabled agency. In the future, we hope to release software that enables independent specialists to connect with each other and form their own micro-agencies through our platform. When it comes to human services, the only way to scale up is to add more people to the picture, and more people create a lot more complexities. We aim to become an Amazon Fulfillment but for human services, enabling highly-skilled independents to quickly scale their businesses into remote micro-agencies.
Where is your favorite fall destination in the city?
Bronx Botanical Gardens are super underrated, it’s a huge forest up by Fordham that I love to wander around when fall hits.