When Greylock general partner Sarah Guo wanted to convince the founders of Seattle-based startup Mystery to take a term sheet from her instead of a rival firm, she flew north to gloomy Washington and asked them to meet her at a restaurant. There, Guo ambushed them with a magician who revealed a check after a magic trick and a customized menu listing the ways Greylock could help the company. “We gave it a shot, and, man, it’s tough,” Guo says.
She went through that trouble to give Mystery’s founders the Mystery experience. The startup creates events (all virtual, for now) and provides software tools for companies to coordinate logistics and track their employees’ reactions. It’s meant to boost morale and connection between colleagues at a time when large in-person gatherings are still precarious and Zoom happy hours have become, for many, trite. Sales have come quickly, with more than 1,000 customers signing on since Mystery began reoriented its business in March 2020. The company announced Thursday that it had raised $18.5 million in a Series A led by Guo’s Greylock. Talent agency Endeavor (formerly WME) is also a new backer in the company, and has made some of its musician and entertainment clients available for larger events. The raise values the startup at $100 million, according to a source familiar with the financing.
Founded in 2018 by Shane Kovalsky, Vince Coppola and Brennan Keough, Mystery started as an event automation tool for consumers which matched couples to experiences based on their shared interests. “We’d plan an entire date night out where you wouldn’t know where you were going until you got there,” explains Kovalsky, who is the CEO. The company found a modest following, and raised a seed round of funding in 2019, but was forced to pivot when the pandemic reached American shores and put the kibosh on dating. “We went from having a great business to an illegal one in about seven days,” Kovalsky says.
With software for event booking and planning already in place, Kovalsky says a transition to a new user base came seamlessly. Though human interactions had largely shifted online, companies still sought for their employees to gel with one another—particularly as the Great Resignation took hold across the workforce. Mystery began selling to companies one-off experiences such as virtual get togethers and corporate gift boxes, and added engagement tools to measure what was most popular. It soon honed in on virtual events, which, similar to its original business, polled workers on their personal interests before matching the team to an event likely to receive the most engagement. Events have included mixology classes and Hot Ones-style interviews in which workers consume spicy wings while being interviewed by a comedian; individuals receive the right level of spiciness for their taste buds, based on their spice profile inputted into Mystery’s software, Kovalsky says.
By the time Guo connected with the startup in November, the company was already doing “thousands of events a quarter and millions in [annual recurring revenue,” she says. About 60% of its 1,000 customers are tech companies, including Amazon, Uber and Stripe, but it also sells to small organizations, including a Girl Scouts troop and a “feminist karate union,” according to Kovalsky. The company has begun transitioning its sales from single event offerings to a recurring model that allowed companies to track employee engagement over the course of regularly scheduled events; now, about 80% of events are recurring, Kovalsky says. From here, he plans to hire rapidly, with a goal of doubling headcount to 60 from 30 within one quarter. While the stakeholders are not so concerned about a post-pandemic world brushing virtual events away (the remote distribution of workers has spread team members across the globe and it’s likely to stay that way, Guo says), Mystery is exploring expansions to its product line, both with in-person events and other formats, such as ten-minute gatherings.
“Our vision before was creating happiness through shared experience,” Kovalsky says. “Today, it’s doing that on a scale that is impacting what’s going to be millions of people this year, versus maybe the thousands that we could have before.”
"Startup" - Google News
February 10, 2022 at 10:00PM
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This Startup Landed A $100 Million Valuation After Shifting From Mystery Dates To Company Events - Forbes
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