With a MBE to his name, given for his services to electric motorsport, Azhar Hussain is on a mission to help bring retailing and logistics into the 21st century. Here, in an interview for GrowthBusiness, he explains how his Internet of Things company, Hanhaa, has grown over the last four years.
What is the vision of the company and what is your personal background?
The vision for Hanhaa was created in mid-2014, roughly one year before the company was officially launched. With advances in technology, the growing Internet of Things market and a clearly defined tracking problem in the logistics industry, we believed that we could provide a solution at scale and at a price point that would make it widely implementable. So began the ParceLive journey!
Personally, my background is in consumer electronics and connectivity, though I have spent many years now building companies. I think if we are able to create a positive change in the industries in which we enter into, then we will have been successful.
How much initial investment did the company need to start and where did it come from?
Initially, a close personal connection enabled me to get together the resources to enter the idea of ParceLive, our first product to market, into the ‘Four Years From Now’ start-up competition at Mobile World Congress 2015 in Barcelona. With just two of us at this point, the competition allowed us to present our concept and we ended up winning the first prize. Having the concept backed, we were able to raise an angel investment of £750,000 which allowed us to hire our first core employees and take up space in our first shared office at the Rainmaking Loft in Tower Hill. Throughout the rest of 2015 we continued developing the product and adding to our team while utilising the great start-up opportunities that the Rainmaking Loft provided.
Through many, many versions of the hardware and software we eventually made it to a point where we were ready to take the product to market and that meant that we had to go to manufacturing. As a hardware company there are many expenditures involved that other software-based technology companies do not face. Given the additional costs of scaling up our team and taking the product to production it meant that the company needed to raise additional funding to reach the next level of our growth.
What was the source of the latest round of investment?
Throughout the early stages of the company we have had great support from Avnet who provide many of the parts and components that make up our technology. Avnet have made a clear strategy to support high growth potential start-ups, not just financially, but throughout procurement and manufacturing processes. It’s through this contact that we were able to secure our most recent funding round with Avnet.
What do scale-up companies need to be aware of to ensure an efficient fundraise?
When choosing the investor for your start-up it is very important to not only choose a financier of the business but a long-term strategic business partner. The relevant experience and common future goals could be a very important contribution to the success of the company.
Therefore, it is crucial to choose wisely and pick companies and/or individuals who truly understand your mission and share your values. It can significantly simplify the whole investment process and benefit both parties.
What exactly will the money be used for and how will you maximise control over your cost base moving forward?
This money is being used largely to take the company from the early manufacturing stages onto a company that is able to deliver globally. We’re continuing to expand our team and will move into new, larger offices in June 2018.
At Hanhaa we’ve taken the decision to utilise our resources by developing our technology in house. By writing the firmware and designing the hardware internally it has allowed us much more control over what it is we do and the direction that we are able to take. Hanhaa also chose to become its own mobile network operator and obtained a license from OfCom to create Hanhaa Mobile. We created Hanhaa Mobile in order to service our own unique needs as an Internet of Things company, as well as offering SIMs to other companies in the industry. Hanhaa Mobile enables us to offer connectivity across the globe while ensuring that our data is secure.
The below video shows how Hanhaa is working with John Lewis to improve their customer returns.
What specific advice would you give to scale-up companies seeking to follow the same route of investment?
The investment process is usually very complex and time-consuming. It requires a lot of effort especially from teams with limited resources. In this situation, it is essential to carefully choose your advisors. Look for advisors with previous experience of transactions for the same type/size of business or from the same industry who have similar ways of working and delivering results; this could save a lot of time and money for your business. If the management of the company is not able to lead and accommodate the entire process, usually the Board of Directors is able to provide valuable feedback and support. Alternatively, professional advice can be obtained by a third party and if this option is the most applicable, it could be helpful for the Company’s “wallet” to work with fixed prices and a clear scope of work. It will allow both parties to manage their expectations in the right way.
Keeping yourself informed about the investment trends within your industry is also very important, especially when the company has to decide on its value and the size of the investment round. After taking the industry trends into account it is necessary to assess your own product and the stage the company is at.
Find out more: Hanhaa