From coverage to capital – demonstrating a link between media coverage and successful fund raising

Darryl Sparey, Hard Numbers co-founder and MD, will be discussing the findings of this report in more detail at the PRCA Measurement Conference. Click here for more details.

Today we launch what we hope is the first in a future series of research papers, focused on demonstrating a return on investment in PR and communications. Our first research report is entitled “Coverage and capital”, and we worked with leading global research business CARMA to study the potential impact that media coverage has on fund raising for technology start-ups.

At Hard Numbers we strongly believe that you can, and should, track the impact that PR and communications has on objectives which are a priority to the business.

We deliberately looked at the impact that PR and communications activity has had on one of the most significant events for scale-up businesses – their Series B fund raising round. This is a critical time for a scale-up business, and the size of the raise at this stage helps provide the real runway for the future of the business. This is where potential pivots of the past will typically have given way to a strong product-market fit, and the business is ready to rapidly grow.

Companies moving from Series A to Series B are unlikely to have made a substantial investment either in above the line advertising or in building large sales teams, so much of the market and investor awareness of the business would have been driven through earned and owned organic media channels – typically trade and consumer press and the online and social presence of the business.

For this reason, we believe that much of the work of both building awareness of the business, and telling its story compellingly to both a customer and investor audience can be attributed to those working across PR, marketing, communications and growth roles within those businesses. And it is for this reason we believe our research demonstrates the impact that media coverage can have on helping businesses to successfully raise money from potential investors.

We looked at a sample of 120 companies who raised a Series B round of funding between January 2018 and July 2020, and we looked at the size of both their first funding round, and their second funding round using resources like Crunchbase, TechCrunch, Sifted and press releases from the companies themselves. CARMA then sourced online content generated by these companies over a two-year period (from July 2018 to July 2020) and focused on the UK online media universe. CARMA’s experienced analysts then sorted through the content picked up by its crawlers to ensure accuracy in the data and analysis.

We then grouped the companies into bands, based on the relative sizes of increases they saw between their first fund raising event and their most recent Series B fund raise:

  • High increase in funds raised – Companies which saw an increase in funding between first funding round and their series B of greater than a 5,000%
  • Medium increase in funds raised – Companies which saw an increase of between a 250% and 5,000% in funding between their first fund raise and their recent Series B
  • Low increase in funds raised – Companies which saw an increase of 250% or less between their first financing and most recent financing

The companies which saw the highest increase in funds raised also generated the highest volume of media coverage – on average a total of 206 pieces of media coverage.

The companies which saw the highest increase in funds raised also generated the highest volume of media coverage, over the period we looked at this – on average a total of 206 pieces of media coverage. This compares to 176 pieces of media coverage for businesses which saw a medium increase in the funds they raised, and 146 pieces of media coverage, on average, for the companies which saw the lowest increase in their funds raised between Series A and Series B.

Within our research report we breakdown the companies we analysed both by B2B and B2C, and we found that the impact of media coverage on fund raising was most pronounced in the B2C sector, with companies generating the highest volume of media coverage seeing, on average, a 35,635% increase in funds raised between their first fund raising event and their Series B.

We also looked at sectors and saw the Business Productivity Software companies saw both the greatest amount of funding over the period of time we looked at, but also saw the highest increases in funds raised between their Series A and Series B rounds. Another success story, sector-wise, was fintech, and fin tech companies accounts for 50% of the top ten B2C and B2B businesses we looked at, by total funds raised.

We’re delighted to have worked with CARMA, a leading global media intelligence business, to produce this report, looking at the impact the media coverage has on funding raising. Richard Bagnall and the team from CARMA were fantastic partners throughout this research, and we could not have worked with a smarter and more diligent group of analysts, empowered with some leading edge technology.

And I’m grateful to the frankly stellar list of companies that have provided case studies for this report, which all demonstrate the impact of media coverage on business growth in their own organisations. This research report features case studies from some of the leading high-growth businesses in the UK including Curve, Papercup, Cytora, HelloDone and Phos. It also features an excellent case study from equity crowdfunding platform Crowdcube. I’m enormously grateful to Amir Jirbandey, Brad Hyett, Ed Hodges, Jo Candy, Max Pepe and Zarina Banu who freely gave their time to contribute to this.

We believe that this research helps those in a PR, marketing and growth function at any Series A funded business make the case for allocating budget to PR and communications from an early stage.

We believe that this report also represents and invaluable resource or best-practice and smart thinking for anyone looking get the most from media coverage with both a customer and an investor audience.

And we believe this research shows that if your business has some hard numbers to achieve, it pays to invest in professional PR and communications.

You can receive a copy of the report for yourself by providing your details using the form below.

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