Bristol-based fulfilment company, huboo, serves over 300 hubs and start-ups across the UK, Europe and the US. In just one year following initial seed investment, Huboo has been able to triple their customer base and grow to a team of more than 70 staff.
Their business model means safer conditions in the warehouses during Covid-19. Mini ‘hubs’ within each physical premises are enabling the team to maintain safe social distancing and minimise the travel distances endured by warehouse pickers and packers.
We speak to huboo’s CEO, Martin Bysh, about he and his co-founder Paul (pictured), grew the company.
Please can you give a brief overview of your businesses (when did it launch? What’s its turnover? How many locations or staff members, etc.)?
Paul and I founded huboo in 2017. We had the aim of helping UK SMBs get their products to customers quickly and cost-effectively. Three years later, we’ve grown to over 70 staff across two warehouses, providing fulfilment to over 300 retailers of all shapes and sizes across the UK, with European and US expansions on the horizon.
Where did the idea for your business come from?
Paul and I were poking around in e-commerce, looking for something to do together. I was bored, running a market research SaaS company I’d founded and since sold while Paul was working in global logistics technology for P&G.
As a result of our poking, we discovered that the small business and start-up fulfilment market, totalling £1bn in the UK alone, was uncontested and ripe for disruption. It was here when the seeds of huboo started to be sown.
What experience do you have in your sector?
We’re a tech company first and foremost. I’ve been a games coder for 20 years and a tech entrepreneur for another 20, whereas Paul was a global logistics expert who had spent the last few years with a remit to shave billions off P&Gs logistics budget. With tech and logistics defining our lives up until this point, between us we were well placed to revolutionise fulfilment.
huboo is clearly a disruptor – what’s the USP?
We reshaped fulfilment from the ground up with our revolutionary hub model, to price ourselves into the £1bn uncontested fulfilment space, a quarter of the total UK market. This space comprised of clients nobody else wanted because (to our eyes) of seemingly arbitrary reasons e.g. they did not turnover a minimum number of units per month or they are start-ups.
What part does technology play in your business?
A huge part. Fulfilment uses lots of software for all aspects of the business, but typically this is third-party software that comes with assumptions/methodologies about the warehouse structure – in other words, it imposes restrictions.
It was immediately apparent to us that we couldn’t revolutionise the warehouse floor if we did not own the software. So, we built our own from scratch and vertically integrated it through the business. Now we are future proofed; any direction we want to pivot towards, the software will bend to make that possible, because it is ours.
What funding did you have to start the business and where did it come from?
Paul and I initially invested for the first two years, during which time Paul designed and tested the hub model while I built a sales and marketing operation, landing the first 60 clients. After that, we raised a seed round from London based VC, Episode 1. We then topped that up with a bridge round to see us to series A, which we have planned for this spring. The bridge came from Episode 1, Ada Ventures, True Capital, and Maersk Growth (the venture arm of the freight giant AP-Moller Maersk).
As the business has grown, what’s the biggest challenge you have faced and how have you overcome it?
Managing the operational stresses while growing at this speed has undeniably been the biggest single task. We’ve grown from two employees to 70 in a year, and from 70 small clients to 300 retailers of various sizes.
Growth at this pace requires systems to be built while in motion, which at times feels like changing a tyre as you drive down the motorway. But we managed it and now have great senior operational staff, including a brilliant COO, to achieve continued growth with (hopefully) much less stress!
Have you turned to external finance to grow? If so, what type – debt or equity?
As mentioned, we raised from a group of very supportive VCs.
What would you say to any other business owners mulling over whether to bring in outside investors?
I have self-funded businesses before with a research SaaS company – it undeniably gives you more freedom and allows you to hang on to more equity. On the flip side, it also increases your exposure to risk and limits the speed of growth. That particular journey ended well, in a sale to a PE-backed market research buy and build, but it took longer to get there than I would have liked and required a lot of cost-driven compromises along the way.
Significant investment, which usually means VC, accelerates the whole process while simultaneously reducing your risk, making the whole experience more pleasurable. Granted, you lose equity, but in my experience, this is more than made up in the overall value you gain. The key is to find aligned investors. You need to make sure their expectations for the business are the same as yours.
How do you measure success for yourself, your investors, your staff and your customers?
Staff want to come to work at huboo because they feel valued and are rewarded working for a company they take pride in being part of. For customers, their businesses grow because of the work we do for them.
Success for investors in early stages is usually a great story for our VC’s next fund raise and a great exit down the line.
Success for myself is an interesting question. Currently, I’m enjoying growing the business, and that’s a success in itself; we have an amazing team and work with some brilliant e-commerce entrepreneurs. Down the line, I’d be disappointed if this business didn’t reach its full potential. Given the size of the market it addresses (around £27bn across the UK, Europe and the U.S.) and the fact that a large chunk of it is uncontested (circa £7bn), this is a billion-dollar valuation.
What business (or personal) tip would you give to other entrepreneurs hoping to grow their businesses during, or even after, coronavirus?
Obviously, you’re not going to want to launch a travel or dating app at the moment, but I’m hoping that the coronavirus becomes an irrelevance quickly for entrepreneurs, with normality (or at least a proximity to it) reasserting itself in the foreseeable future.
If I was in the middle of a dating app build, I wouldn’t be rethinking that decision – though I would be keeping costs to minimum to lengthen the pre-launch runway.
From an investor point of view, anything that depends primarily on bringing people together in the real world or relies on them being together will seem slightly riskier post-corona, and anything that replaces real world meetings (e.g. GP appointments) with video will seem slightly more attractive.
Who has most influenced your working life?
My family. I used to obsess about any project I was working on to the exclusion of all other areas of life (so I didn’t require any help focusing on the business). This is a great way to burn out and overthink. My wife and kids take me away from work, re-energise me and broaden my focus, making me better at seeing the bigger picture and being a more empathetic manager.
How do you relax outside of work?
I spend a lot of time with my two boys (aged 6 and 10) teaching them the things I loved at that age. I’m currently writing a computer game with my 10-year-old which he’s convinced will set him up for life – we’ll see! My wife’s Turkish so we spend as much time in Turkey as we can. Otherwise, I read a lot and run occasionally.