Sydney-based logistics start-up Shippit has knocked back $2.8 million in oversubscribed series A funding, instead opting for a strategic $2.2m funding round that it says will drive an expansion into Asia-Pacific.
Shippit’s co-founder and joint-chief executive Rob Hango-Zada told The Australian that when the funding, led by APAC venture fund Aura Group, exceeded the company’s initial funding target, he and joint-CEO William On decided to re-evaluate their needs.
While the overwhelming interest was flattering, Mr Hango-Zada said Shippit was not just interested in the dollars.
“We received a humbling flurry of interest, however, we didn’t think it would be wise to accept more capital than we actually required,” he said.
Shippit was originally seeking $3m, but attracted a total offering of $5m in a round led by one of Shippit’s advisers, Howard Leibman of Equity Venture Partners, who also ran Deputy’s $US25m raise earlier this year.
“Capital is an interesting thing, we’ve always been pretty capital efficient,” Mr Hango-Zada said.
“Since launch we’ve only raised about $800,000, and when it came to this raise, we looked at our burn rate, and looked at what our projections were and what we needed.
“During the raising process, Shippit’s user base grew ahead of our projections, which reduced our capital requirement and prompted us to review our growth ambitions.
“In this time our subscriber base grew by more than 40 per cent, with about a 200 per cent increase in monthly revenue.
“We’ve always been fiscally responsible, however when we reconsidered the amount that was required to fuel our next phase of growth, the figure was actually much closer to $2m.”
According to Mr Hango-Zada the new funding has been allocated for investment in strategic hires, building out the local team, as well as supporting rapid expansion into international markets.
The raise was led by APAC venture fund Aura Group, which has prior investments and Catapult Sports, Freedom Insurance and InStitchu, while additional capital also came from AddVenture Fund and RTL Group Investments.
“We always look at our investor set based on the individuals,” Mr Hango-Zada said.
“A lot of that went into this process for us, we had a fair bit of interest but pushed back those we didn’t have the right chemistry fit or not the right synergy.
“We hand-picked them because we wanted them to be around the table. That’s underestimated in this day and age and forgotten by a lot of businesses.
“A lot of companies are about raising as much capital as possible.
“It’s a bit like a Formula One car going to a pit stop.
“You don’t want it to get there too soon and have too much petrol in the tank, and at the same time you don’t want to drive it in too late and not have enough petrol.
“Others have left it too late; we’re very strategic about how much we’re raising and when.”
Shippit, which moves more than 250,000 parcels via its platform each month, plans to expand into the APAC region within the next 12 months.
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