After raising $1 million from an array of investors, the co-founder of freight forwarding digital marketplace startup Mizzen Group believes the most attractive thing startups can present to investors is experience.
“Fundamentally, though you might change your business model over time, it’s really important for a startup to have a solid team in place. This makes you really investable,” Mizzen co-founder and chairman Alan Taylor told StartupSmart.
Mizzen’s team is made up of a number of people with deep experience in both digital and shipping lines, who are building Mizzenit, a marketplace for freight forwarders to buy and sell containerised freight on shipping lines via the spot market.
Taylor first came up with the idea after he and Mizzen managing director Jon Charles were discussing the lack of transparency and stagnant rates in the spot freight market, wondering why no one had digitised a marketplace for an industry where bookings were predominantly done via email and phone.
“We thought: ‘Why don’t we build a digital marketplace to allow this to happen in the 21st century, make it similar to how you could book a seat on an airplane?” he says.
“That was the whole premise, and we headed off on the path three years ago. Now we’ve had the product in the market for over a year now.”
Mizzen is working with eight of the world’s largest shipping lines, which Taylor says make up approximately 60% of the market. Around 70 freight forwarders have used the Mizzenit service and the company is focused on capturing the Australian market before looking to expand into markets such as Asia.
Taylor’s experience is namely as an investment banker with advisory and investment firm Inteq, where he worked for more than 15 years. After leaving that role, he started healthtech and treatment startup Clarity Pharmaceuticals, which has received more than $16 million in funding since its launch in 2010.
$1 million raise in the bag
This month, Mizzen closed a $1 million raise from a variety of investors in the freight forwarding industry and sophisticated technology investors. It’s the first time the startup has received external funding, says Taylor, who has been using the startup’s formative years to work on a strong product-market fit.
He believes the funding will go a long way towards growing the Mizzenit platform and providing opportunities for new initiatives.
“This cash will drive our new initiatives and help us enhance our marketplace, along with launching some industry-firsts and bringing on new people to help us exploit the large market opportunity,” he says.
However, he doesn’t view the raise as a seed round. Nor is it the largest deal he has done.
“I’m an old-fashioned investment banker — I don’t have this sense of seed or Series A rounds. This raise puts us in a nice position to grow our company and hopefully seek larger amounts from more strategic investors down the path,” he says.
“Having raised money over the last 15 years, a million dollars is still the smallest raise I’ve ever done,” he laughs.
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But, above all else, Taylor says startup founders need to focus more on who they have investing, rather than the amount invested.
“What’s key to capital raising is bringing in the right investors who are able to add the right value to the company,” he says.
“I’m somewhat experienced in raising money so that wasn’t an issue, but raising the right money from the right people, that’s what was critical for us. It was a six-month process, and most of that was just getting the right people on board.”