On-demand courier startup Zoom2U has raised $4.2 million in funding, as it prepares to venture into a new sector, and a new geography, after riding the wave of e-commerce in Australia.
The round was led by Aussie investment management firm Perennial Value Management.
Founded in 2014, Zoom2U is an on-demand courier platform allowing customers to connect with delivery drivers and track their parcels, meaning no more missed deliveries or confusion about when you’re supposed to be home.
In May 2016, the startup raised $1.85 million as it accelerated its expansion plans. Since then, the team has been building out functionality, developing the platform and investing in marketing efforts, founder Steve Orenstein tells StartupSmart.
Earlier this year, Zoom2U hit the milestone of a million deliveries completed, and the platform now has about 2,000 drivers on the books.
Within about six months of launch, the startup was turning over about $50,000 per month in revenues, the founder says. Now, that figure is closer to $1 million.
“There’s been substantial growth,” he says.
“It’s really grown rapidly.”
“It didn’t need to be frustrating”
Zoom2U has largely ridden the wave of e-commerce in Australia, and the founder sees that trend continuing.
“That was a big part of the reason as to why I started the business,” Orenstein says.
He had sold his previous company and was taking some time off. During this time, he happened to be doing a lot of online shopping.
“I kept on experiencing couriers arriving when I didn’t know they were going to.
“A courier got really annoyed at me for not being at home, and I realised that technology could solve this.
“It didn’t need to be frustrating,” he adds.
We’re still in the early stages of e-commerce, he suggests. As it becomes easier to buy online, more and more people are doing it more. And that trend is only set to continue.
If vendors adopt faster delivery options, then they’re likely to be more successful online, he says. And, the easier it is to shop online, the more the sector will grow.
“I think Australia is definitely behind, compared to what else is happening overseas,” Orenstein says.
Now, it’s down to vendors “to actually take on and start using faster delivery services”, he adds.
“The speed of that delivery is going to drive growth.”
Onwards and upwards
The funding is pegged for further expansion, and development of Zoom2U’s platform. But, the team is also looking to build out the development team to repurpose some of the existing technology and create a whole new app: Locate2U.
This new offering is designed to provide the same courier-matching and tracking for service businesses, for example, to tell people when tradies are likely to arrive.
“In the same way that I had the problem with not knowing when the courier was arriving, I experienced the same problem with not knowing when a tradesperson was going to arrive.”
According to Orenstein, the new functionality will “more than likely” be up and running by the end of this year.
And, while there is still a lot of opportunity for Zoom2U in Australia, by early next year Orenstein expects to launch the business in the US. After that, the world is his oyster.
“I think there’s a substantial opportunity both in the delivery space and in what we’re doing with Locate2U,” he says.
“I don’t like to predict … but it’s about working day in, day out, and improving on what we’re doing.”
No quick fix
But, having said that, if there’s one thing Orenstein says he’s learnt from his startup journey, it’s that “everything takes longer than you expect”.
Founders have to be patient, and just keep plugging away.
“Keeping at it is really important, and making sure you’ve got the endurance to keep on going at something.”
It’s a case of maintaining perseverance and focus, he says. And, while there are no quick fixes to avoiding procrastination, it can help if you’re truly passionate about your venture.
“It’s about making sure that the problem you’re solving is something you’re passionate about,” he says.
“If you’re just doing it because you want to make money, it’s unlikely that you’ll have the motivation to keep on going when things become more challenging.”