Sendle scores $45 million to double down on US success, after seeing 1000% growth in the market

Aussie carbon-neutral parcel delivery service Sendle saw its US volumes spike by 1000% during 2020, as the COVID-19 pandemic led to an uptick in e-commerce activity.

Volumes in Australia also more than doubled in the same 12 months.

Now the startup has raised a whopping $45 million in Series C funding as it doubles down on that growth and eyes up a fight with the US logistics monopolies.

Founded in 2014, Sendle is a registered B-Corp offering a more environmentally friendly delivery service, specifically designed for small businesses. The startup set out to disrupt Australia Post with flat-rate fees and free tracking.

The latest funding round attracted backing from Afterpay’s AP Ventures, which led the round. Existing backers — including Federation, Full Circle and NRMA — also contributed, and AP Ventures chief Hein Vogel has joined the board of the startup.

The raise follows a $19 million cash injection back in August 2020. At that time, Sendle co-founder and chief James Chin Moody told SmartCompany that COVID-19 was causing sustained demand at the level the business would usually only see around Christmas time — plus more.

Since then, things have ramped up another notch, Chin Moody says.

The COVID-19 pandemic led to two major shifts in the e-commerce sector, he tells SmartCompany. The first is that more people started shopping online.

The second, bigger and more long-term change is that more merchants than ever are selling online.

That includes retailers that had previously been bricks-and-mortar only. But Sendle research has also found that some 51% of new merchants using Sendle during the pandemic were “side-hustlers”, Chin Moody says.

“To be able to see more small businesses coming online … that’s been a huge shift.”

Small businesses deserve better

The strong growth in the US proves Sendle’s strong product-market fit in the region, Chin Moody explains.

One of the goals after the Series B round last year was to test how well the model translated Stateside — one of the largest e-commerce markets in the world. The figures from 2020 show just how much demand there is.

“Small businesses in the US deserve better,” the founder says.

“They’re paying more than they should and they’re getting less than they deserve … there is definitely an unmet need.”

This funding will allow Sendle to double down on its growth in both the US and Australia. That means building out the network and working on continually improving the product, as well as building out the teams in both countries.

The focus is on improving the customer experience and offering up the services they need, Chin Moody says.

“If our merchants are successful, we’re successful.”

And while the US is “absolutely” the focus for now, Chin Moody is also considering making a push into Canada, and ultimately other countries too.

‘We’ve pulled the future closer’

The COVID-19 pandemic led to unprecedented shifts in e-commerce. But, 18 months on from the onset of the crisis, can we expect demand to dip again?

What were the pandemic trends, and what’s here to stay?

Chin Moody notes that what we actually saw was not a sea change in e-commerce, but the acceleration of an evolution that was already underway.

Now, he predicts we will see the space becoming more sophisticated, with more focus on what he calls the “plumbing” of online shopping.

Things like payments and shipping weren’t quite as visible previously. But when done well, they can add a huge amount of value.

“Shipping is the new battleground of e-commerce,” he says.

This is also what made AP Ventures such a compelling partner, the founder adds.

The venture firm is backed by Afterpay, another business that saw volumes boom during the COVID-19 pandemic, as the e-commerce trend ramped up.

“This trend is not going away,” Chin Moody says.

“We’ve just pulled the future closer a bit more quickly.”