Sendle secures $19 million as delivery demand skyrockets during COVID-19

Aussie logistics startup and Australia Post competitor Sendle has raised $19 million in funding, as the COVID-19 e-commerce boom leads to sustained demands at Christmas levels and more.

The oversubscribed round was led by new backer King River Capital, and also included new funding from Alberts Impact Capital and Marinya Capital, as well as repeat funding from Federation, Rampersand, Full Circle Venture Capital and NRMA Insurance.

The funding follows a $20 million Series B funding round in January last year. The startup also branched out into the US market in November.

In early-2020, things were ticking along nicely. Then, along came COVID-19.

“We’re experiencing the biggest shift to online that the world has ever seen,” Sendle founder and chief James Chin Moody tells SmartCompany.

Not only are there more people shopping online, he notes, but more and more small businesses are also selling online for the first time, to cope with dwindling footfall.

For Sendle, that’s led to parcel volumes more than twice what it saw during the peak Christmas period.

In particular, when Victoria entered stage four lockdown, “we absolutely saw a surge in folks shopping online”, Chin Moody adds.

At one point, Sendle was processing more than 350% above the volumes seen in the same week in 2019, he says.

He doesn’t reveal any figures, but the founder does say that volume increase correlates with revenue growth too.

But, while there’s “a lot of pressure on the network”, Sendle has shifted to contactless pick-up and delivery, and some partners are offering seven-day delivery, to make sure they stay on top of things.

“Our network has scaled very gracefully,” he says.

Small business superpower

The move to e-commerce has been swift, but Chin Moody believes it’s here to stay.

“We are all experiencing a period of forced behaviour change,” he says.

“The way we shop is changing, and even the types of things we buy is changing as a result of this.”

Things might go back to normal, in a sense, he adds. But once behaviour changes, it doesn’t tend to go back. People who had never shopped, or sold, online will likely be more open to it.

At the same time, for businesses that have previously been solely bricks-and-mortar, e-commerce just adds another string to their bow, he says.

“I don’t think online will ever replace offline, I think it just becomes another channel,” Chin Moody explains.

“This is the time they’re going to take that plunge,” he adds.

Chin Moody notes that many of the small businesses that have thrived during the pandemic are those that have been able to pivot quickly.

A “small business superpower is being able to be flexible and adapt,” he says.

Sendle is out to “level the playing field” for those businesses when it comes to shipping and logistics, he says.

At a time when people can’t get out of their homes and browse the shops in person, logistics becomes an increasingly important part of the economy, he says.

“We now have a whole lot of small businesses who need e-commerce, who need logistics, in order to keep doing well,” he explains.

For a small business that used to rely on people walking past your shop front, now you can not only access those customers digitally, you can also access customers all over Australia, Chin Moody says.

“We’re there for the small-scale logistics for the small business owners to hopefully make the transition to e-commerce during COVID — because they really have to.”

Christmas is coming

The latest funding is pegged for investment in Sendle’s network, and expanding its network to support continued growth.

The startup is also focusing on its partnerships with the likes of eBay and Shopify, providing support to the merchants using Sendle through those platforms.

Also, Chin Moody is looking ahead. There are just 20 weeks left of 2020, and Christmas is just around the corner.

If Sendle is seeing Christmas-esque volumes now, who knows what actual Christmas could look like, especially if there are still restrictions in place.

“We’re really thinking about how we can deliver for everybody over what will undoubtedly be the busiest Christmas and peak season that we’ve ever seen,” he says.

If anything has defined this year, it’s uncertainty, he notes. But, he urges small businesses to start thinking about the festive season sooner rather than later too.

“There’s so much volatility as a result of COVID, but one thing small businesses can do is think hard about their options,” he says.

“Now is the time to do it, not wait until October or November.”

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