ParcelLab Nets $112 Million Series C, Hopes To Disrupt U.S. E-Comm Logistics
In 2014, Tobias Buxhoidt and Julian Krenge began reaching out to online retailers to find out what frustrated them most about the process of getting their goods from point A (warehouse) to point B (customers). From their conversations, Buxhoidt and Krenge, who as consumers were all too familiar with the “Where the heck is my package?” phenomenon, identified two pain points.
ParcelLab founders Tobias Buxhoidt (CEO), Julian Krenge (CTO) and Anton Eder (COO) - PARCELLAB
Firstly, once retailers dispatched their goods via third-party delivery services like FedEx or UPS, they—like their customers—had no control as to where or when those goods would arrive. Secondly, because they relied so heavily on an intermediary after the online-shopping process was complete, these same retailers were having difficulty maintaining relationships with their customers.
“Those retail brands we were speaking to said, ‘This is so frustrating...we spend so much money acquiring a customer…and then the last thing they see from us is just an email saying well, thanks so much for your money. Here’s your FedEx tracking number, and goodbye,’” Buxhoidt explained.
With these problems in mind, and a desire to fix them, Buxhoidt (CEO) and Krenge (CTO) added COO Anton Eder and launched ParcelLab, a company that focuses on optimizing the end-to-end experience of e-commerce delivery from an enterprise standpoint.
Initially launched and tested in Germany and other European countries, ParcelLab has now set its sights on disrupting e-commerce logistics in the United States, and to do so, has raised a $112 million Series C led by New York-based Insight Partners with participation from Endeit Capital and existing investors including Capnamic Ventures and Coparion.
ParcelLab’s intense focus on its customers’ customer retention is what differentiates it from other outfits in the post-sale space. It sees every step in the delivery process, straight through to last-mile details, as an opportunity for the retailers it services to re-engage consumers. Delay in shipping? ParcelLab’s platform allows its customers to communicate as much by dispatching branded emails. Need a return? ParcelLab facilitates this, too, directing purchasers through an experience that is more personalized than dealing with UPS’ website might be. Thus, the entire post-sale process pinch-hits as an exercise in marketing—one that’s led certain of ParcelLab’s customers to email open rates of over 90% and double-digit basket size increases, the company says.
According to Matt Gatto, Managing Director at Insight, that ParcelLab has been able to use its model to appeal to large customers—it counts FarFetch, IKEA, and Lidl among the more than 500 brands it serves—by tackling their relatively complex operations also made it a particularly persuasive business.
“When you couple that with what a lot of customers described as very quantifiable and hard-dollar ROI, this is a pretty interesting product category and a pretty interesting segment in which they're operating,” Gatto said.
While neither Gatto nor the founding team would reveal ParcelLab’s exact revenue figures—or its valuation—both attested to growth of over 100% year-over-year. Gatto also added that, depending on the period, ParcelLab’s Net Retention Rate hovered between 130 and 200%.
“What I'd say is revenues are growing really quickly. They're adding a lot of new logos, but they're also growing within their customers at a rapid rate,” Gatto said.
As to their ability to outpace American competitors—San Mateo-based Narvar is an especially formidable player in the “Operations Experience Management” space in which ParcelLab also plays—both Buxhoidt and Gatto are confident.
“The biggest competitor is probably still the status quo,” Buxhoidt said from his home in Munich (though he has a Visa, pandemic-era regulations have prevented him from going boots-on-the ground at ParcelLab’s New York office). “People not really realizing that there is a critical part of the customer journey that they are not managing and not controlling.”
With this new funding, and the massive tailwind provided to e-commerce by pandemic-fueled changes in consumer behavior that show no signs of slowing, Buxhoidt believes that he and his team can unseat current industry leaders, like Narvar, Malamo and AfterShip.
“It’s getting so expensive to acquire customers,” Krenge says of ParcelLab’s strategy to help retailers retain customers. “Slowly but steadily they realize, ‘Hmm, maybe it’s cheaper that the customers I once acquired, I just keep, instead of throwing them away and finding new ones each and every time.”
THE AMRANI GROUP’S ROLE
Situation - After a few years of expanding into the US Market, ParcelLab hired The Amrani Group to provide US GTM advisory services on their
Challenge - Having attempted a few different US GTM strategies, Parcel Labs was in need of deep domain expertise in Retail US GTM that combined cross-cultural understanding and Enterprise Retail Buying Behaviors.
Results - Within 1 year of working with The Amrani Group and gaining traction in the US Market, parcelLabs raised a $112M Series C and became a unicorn.
Credits:
This article was originally posted by Forbes on May 11, 2021. The original article can be viewed at https://www.forbes.com/sites/ninawolpow/2021/05/11/parcellab-nets-112-million-series-c-hopes-to-disrupt-us-e-comm-logistics/?sh=65e9d6c364ca