- Hubo, based in Bristol, England, raised £ 60million, or roughly $ 81million, in a Series B round.
- The startup sees Fulfillment by Amazon as its biggest competitor.
- Insider got an exclusive look at the pitch deck he was using to raise new money.
- See more stories on the Insider business page.
When Martin Bysh and Paul Dodd met and chatted during their sons’ soccer practice on Saturday morning, they couldn’t have predicted they would start a business together.
Bysh was the founder of UK media intelligence firm Gorkana, while Dodd was a logistics expert who had spent more than two decades at consumer giant Procter & Gamble.
Ultimately, their discussion at the edge of the field led to the creation of Hubo, an order fulfillment startup that provides a “micro-warehousing” service with people, not automation, at its center. Hubo, founded in 2017, just raised £ 60million, or roughly $ 81million, in a Series B round.
Hubo, based in Bristol, England, provides fulfillment services to small and medium-sized e-commerce businesses by separating large warehouses to create smaller sites with dedicated staff and inventory for shorter periods. Customers track orders through software that integrates with channels such as Amazon, eBay, and Shopify.
E-commerce has exploded during the pandemic, with a multitude of businesses springing up to capitalize on the trend. In the first half of 2021, e-commerce companies raised around $ 30 billion in venture capital, according to PitchBook.
Amazon offers its own storage and shipping service, Fulfillment by Amazon, which Hubo sees as its biggest competitor, but this is “unrealistic” for smaller players who don’t sell through Amazon, Bysh said.
“If you sell through eBay or Shopify and ship to FBA… it costs about three times as much,” he added. “It’s because they’re using old-fashioned forms of execution, or they’re using automation, which is really expensive.
Hubo targets customers with complex processes or low margin products, such as vintage or used sellers. Bysh said traditional players “won’t touch” these companies because of the cost of onboarding and account managers. “Having you as a customer is an expense,” he said. “If you don’t make a lot of money for them, it’s not worth having.”
The last round of the company was led by the sovereign wealth fund Mubadala Capital. Its existing investors Stride, Ada Ventures, Hearst Ventures, Episode 1 and Maersk Growth have joined the cycle, bringing Hubo’s funding to date to nearly £ 80million, or roughly $ 108million.
Getting VCs to invest was a “ridiculously” tough sell at first, Bysh said, as the world is increasingly defined by software. “They looked visibly shocked when they came out of the warehouse,” he said, adding that the Series B was much easier to raise than the previous rounds.
Hubo said he would use the new money to double his European expansion. Hubo is expected to launch in Spain next month and in Germany by the end of the year. The company aims to enter 10 more markets next year.
Bysh expects its workforce to grow from 200 to 500 by the end of the year and to 2,000 by the end of 2022. The company is also expanding its software platform with a suite of features from e-commerce to help customers manage sales and get started online. stores.
See the pitch deck Hubo used to raise the money below.