Founders that hustle

Cliché, but this continues to be a question we ask ourselves for each new opportunity: can the founders do what it takes to persevere. What we recognised in Rob and Will as founders from our very first meeting was their uniquely complementary skills, their unhinged enthusiasm for the challenge, and most of all, their ability and willingness to listen and learn from others.

The Seed round was all about investing in Rob and Will as founders to see if they could execute a basic and repeatable promise and experience to retailers. They nailed it.

Shippit continues to demonstrate one of the best can-do cultures we have seen.

Series A: a defensible moat

Fast forward to Series A. We examine how the company created a moat surrounding its product and opportunity set, the key to it cementing a credible position within the market.

Building trust with customers

As a 'SaaS as a Network' business, the size of the marketplace (or network) was critical to underpinning demand for the software. To achieve material growth in the network in the early days it was critical to build demand volume that would provide for a critical mass of suppliers (carriers). Winning large volume Retailers to underwrite the ability for the business to attract carriers on the platform was key. The business focused on winning key logos early, whilst simultaneously creating brand association & awareness through content-led programs like the Rocketeers of Retail.

This volume also enabled the company to prove out its carrier selection algorithm, an automated assessment of the "right carrier x right delivery type x right price" (think of this as the logistic industry’s version of Google’s quality score!). Shippit began to provide Retailers with an aggregated view of their deliveries and started directing volumes to carriers a Retailer may never have used before. The improved performance off the back of these initiatives formed the foundation for a trusting relationship between Shippit and the Retailer.  

Shippit offered Retailers transparency. The delivery of that promise (no pun intended...) built a small flywheel in its volume momentum that has underpinned the business’ growth to date.

Route intelligence

Building a sustainable competitive advantage through the delivery insights provides benefits beyond their customers, but also the parcel recipient.

Shippit is able to intelligently route parcels for e-commerce retailers and in turn provide superior quality, performance and rates.

Series B: Product-led growth

We talk a lot about product-led-growth ("PLG") within the virtual four walls of Tidal. We see this as a critical capability for a startup to achieve superior unit economics and significant operational leverage.

Shippit’s ability to unlock the value of PLG in the last 12 months played a critical role in the success of its Series B.

Things at Shippit were growing exceptionally well from the end of 2019 into early 2020, but we still had to ask ourselves all the normal questions when COVID hit: 'How will we be impacted? Do we need to cut costs? How will we keep staff safe? How will we change the way we sell when we can’t meet anyone?'.

Rob, Will,  the entire leadership team and staff stepped up and made some tough calls – they reduced the workforce by 20% and cut expenditure on non-core projects. Most importantly, Rob and Will sat back and asked the question:

The actions they implemented in response have led to achieving some of the best growth SaaS operating metric's we have seen in any market. John Curtius from Tiger Global agrees with us, having been quoted in the AFR saying, "Shippit has some of the best metrics we've seen for a company raising at this stage".  

Positioning and customer segmentation

We took a deep-dive with the team on the positioning of Shippit’s value prop for each of its customers segments. The end result: Enterprise and SMB segments now have fundamentally different messaging and value propositions, which drive more efficient marketing spend and higher customer satisfaction & stickiness.

High volume funnel

The most significant change was the process of structuring their inbound funnel to support high volumes. Introducing more self-serve capabilities allowed the shift from pre-sales to post sign-up product qualified leads that were either pure low-touch or assisted by a Customer Success function. This materially impacted their ability to acquire customers efficiently at scale. This transition (which is in continual refinement) came to fruition when the explosion in demand during lockdown serviced the step-change in growth with limited headcount expansion.

To a billion parcels and beyond 🚀

We’ve now invested in Shippit at Seed, Series A, Series A extension, and Series B, and we know we’ll keep going. We are in the early days of mass consumer adoption of e-commerce and we believe these founders and this business has what it takes to build a significant enterprise. We congratulate them on the journey so far and look forward to the challenges ahead.

A note on the e-commerce thematic

We have strong conviction that there will be a number of winners in the e-commerce tooling space – in other words, the businesses that provide the picks and shovels to Retailers that help them build and deliver great experiences for their customers (other examples span product search, payments, inventory management and so on). Post-transaction, logistics for the fulfillment of the order is a critical component to ensure an e-commerce experience has comparable or improved benefits over traditional shopping. Shippit is advancing towards this ambitious goal within Australia and South East Asia. If you're a visionary founder who is ready to make waves, please reach out via our website.