Fast-growing supply chain management software company Shipeezi has raised pre-seed funding of $1 million as it bolsters its footprint servicing national retailers, but founder Carlos Ferri emphasises the round has nothing to do with money and everything to do with the expertise of new investors.
Ferri tells Business News Australia the pre-seed attracted support from the likes of Linktree CTO and former Atlassian VP Zak Islam, as well as Geoffrey Thomas and Peter Ramsay, formerly of supply chain consultancy XAct Solutions which was acquired last year by TM Insight to become TMX.
He says a large share of the funding also came from Investible, one of the early backers of Canva, and Archangel Investors, which has also invested in Sendle, Oscer and Heaps Normal.
"We didn’t need money or anything. The whole idea behind the raise was because we’re preparing ourselves to go to the ASX in a couple of years," explains Ferri, the Sydney Young Entrepreneur of the Year 2019, who has also won the city's Young Entrepreneur Award - Professional Services for three years running.
"I wanted people to actually have skin in the game - people from the industry, people with experience, people with a network, so that when we’re raising $25-30 million I don't need to keep pitching to people."
Shipeezi, part of Ferri's Zapala Company, provides end-to-end supply chain visibility for some of Australia's largest retailers including Coles and Country Road, while it also has customers in 12 countries including the world's largest container shipping line Maersk.
"Large retailers rely on Shipeezi to have full visibility and control of their shipments, on a global or local level," he says.
"Our agnostic control tower functionality gives retailers the right tool to create their own logistic hub and integrate all their suppliers, freight managers, carriers and last mile deliveries."
He adds Shipeezi has also been approved by Integrated Cargo System (ICS) to be one of its software providers for customs clearance, with integration work currently ongoing.
"Our strategy over the next 12 months is we would like to help retailers create their own logistics hub, like Amazon did in 2007," Ferri says, flagging a Series A raise is likely around that time as well.
Ferri highlights some of the investors - such as Islam, Thomas and Archangel's Ben Armstrong - came on board through the Startmate accelerator program, through which he learned there were more significant opportunities to focus on services for retailers, rather than mostly freight forwarders and transport companies as was the case before.
"They all said Carlos, you are not trying to be a digital freight forwarder. You’re not trying to actually give a booking system with the same shipping lines, the same trucks, the same airlines. You’re actually bringing solutions," he says.
Islam says Carlos Ferri shows the clarity in his vision to tackle very acute problems in the supply chain that will likely only get worse in the years to come with disruptions from climate change. He says the "here-and-now problem" is obvious, but in what he suspects will become a more decentralised economy it will be crucial to provide end-to-end visibility to users about where their products are.
"Carlos is well positioned to provide that visibility. Getting that early entry advantage into that market also allows Carlos to innovate as the systems change over the next little bit," he says.
"I'm very active in the in the startup community, and what I really love is to work with founders who are passionate about their problem, to continue to help them refine their ideas, look around corners, especially when it comes to the opportunity in the market.
Thomas, who was also the chief logistics officer at Woolworths for eight years, says it was the end-to-end aspect of Shipeezi that attracted him as an investor, with easy integration and very competent visibility.
"It's a tool that you can plug into relatively quickly, and you can manage a lot of complexity. Carlos has worked in the industry. He’s not what you would describe as a tech founder. He understands the dynamics of the industry, which is what was important to me," Thomas says.
"The interesting thing about Shipeezi is that Carlos has focused more on the shipping side, so the first mile rather than the last mile.
"The last mile is a particularly crowded space now and there is a plethora of pretty competent solutions that people are trying to crack in every developed country, but less so the first mile."
The new investor believes his extensive experience in logistics throughout the Asia-Pacific region as well as Europe will be able to add value to the company.
"Also what's important with a business like that is being able to get the ear of the key clients. That’s extremely difficult or someone founding a business where the business doesn't have the same level of brand awareness as perhaps an overseas competitor might," he says.
The investment opportunity was brought to Ramsay by his former colleague, making the final investment decision as he believes the product is "actually needed".
"There’s high upside in it – it’s aligned with the future trends of industry and logistics which will become increasingly more prominent, and particularly controlling supply chains. That’s largely what this particular application offers," he says.
"Whilst he’s still small and it’s very early days for him, what his company does provide is a very high degree of agility in being able to develop the products not only quite quickly to a higher level of quality, but actually very much aligned to what the market needs are."
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support