Sydney delivery startup Parcelpoint has raised $4.5 million in funding as it ramps up its growth and prepares to launch a fleet of electric vehicles.
The funding comes entirely from existing shareholders, Parcelpoint co-founder and chief Julian Leach tells StartupSmart.
However, some of these investors have recently banded together to form a new private investment firm AS1 Growth Partners.
Founded in 2011, Parcelpoint allows online shoppers to have their goods delivered to a nearby corner shop, or any location open at convenient hours, in order to avoid missing their parcel.
Leach says he came up with the idea through personal experience. He missed a delivery and wasn’t able to get to the post office to collect it. Eventually, it was returned to the sender.
“We’ve all been there,” he says.
“I had one of those lightbulb moments,” he adds.
“There must be a better way of doing this.”
Now, Parcelpoint has a network of convenient locations for collecting and dropping off post all over Australia, Leach says.
The startup is seeing growth in user numbers of 103% year-on-year, he adds, and while he doesn’t reveal exact figures, he says revenue growth is “also on a very nice trajectory”
What customers want
This $4.5 million in funding will be used towards accelerating that growth, “going even faster than we have over the past few months, and making sure we’ve got the resources to do that”, Leach says.
However, the team will also be rolling out a fleet of dedicated Parcelpoint electric vehicles, “in key areas where we’ve got enough volume for that to make sense”.
Already, there are four vans delivering Parcelpoint packages, but the funding will allow Leach to add to that number.
Already, delivering multiple parcels to one address means less driving and less traffic, he explains.
“It’s even better if we can make those deliveries electric powered.”
Equally, with more and more people taking the environment into consideration when making consumer decisions, a sustainable solution may well be good for business.
“We’re doing it partly because we think it’s the right thing to, and partly because we know it’s what customers want,” Leach explains.
Currently, Parcelpoint is focusing on growing in Australia. However, “in the future I think there’s a great opportunity to take the model into other markets where e-commerce is growing”, the founder says.
There are other markets where e-commerce hasn’t taken off in a big way yet, he says, where there will be a need for infrastructure and services to meet consumer demand.
“We’ve built a bit of a template now in this market,” he explains.
Tackle something tricky
For other founders bridging the digital and physical spheres, Leach has three pertinent pieces of advice.
First, make sure you’re solving a genuine problem, and a difficult one.
“It’s a lot easier to come up with a solution that’s viable when it’s a really hard problem to solve,” he says.
When something in the digital space — such as online shopping — has to interact with the physical world — through the delivery — there are bound to be problems that are particularly tricky to solve, Leach observes.
It’s got “an additional layer of complication”.
Leach also advises prospective founders to focus on either a market that is growing quickly or one that you think is about to blow up.
That “makes for a much larger opportunity”, he says.
Finally, Leach advises running a small, low-cost pilot before turning your attention to scaling or trying to raise funding.
“Building out the kind of proof points you can get from that kind of pilot is absolutely invaluable,” he explains.
“It means you can really establish that you’re working on the right thing.”