Huboo is building an alternative to Amazon’s fulfillment service with micro-warehouses. Check out the pitch deck it used to raise $81 million.
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- Huboo, based in Bristol, England, raised £60 million, or about $81 million, in a Series B round.
- The startup sees Fulfillment by Amazon as its biggest competitor.
- Insider got an exclusive look at the pitch deck it used to raise the fresh cash.
When Martin Bysh and Paul Dodd met and got to talking at their sons’ Saturday-morning soccer practice, they could not have predicted they’d launch a business together.
Bysh was the founder of the British media intelligence company Gorkana, while Dodd was a logistics expert who had spent over two decades at the consumer giant Procter & Gamble.
Ultimately, their pitchside chat led to the creation of Huboo, a fulfillment startup that provides a “micro warehousing” service with people, not automation, at its center. Huboo, founded in 2017, just raised £60 million, or about $81 million, in a Series B round.
Huboo, based in Bristol, England, offers fulfillment services to small to medium-sized e-commerce businesses by partitioning large warehouses to create smaller sites with dedicated staff and stock for shorter periods. Clients track orders via software that integrates with channels such as Amazon, eBay, and Shopify.
E-commerce skyrocketed during the pandemic, with a host of businesses popping up to capitalize on the trend. In the first half of 2021, e-commerce businesses raised about $30 billion in venture capital, according to PitchBook.
Amazon offers its own storage and shipping service, Fulfillment by Amazon, which Huboo sees as its biggest competitor — but this is “unrealistic” for smaller players who are not selling through Amazon, Bysh said.
“If you’re selling through eBay or Shopify and shipping to FBA … it costs about three times as much,” he added. “It’s because they are using old-fashioned forms of fulfillment, or they’re using automation, which is really expensive. The only way they can make it cheap is if it’s Amazon plus FBA, because it’s cross-subsidized.”
Huboo targets customers with complex processes or low- products, such as vintage or secondhand sellers. Bysh said traditional players “won’t touch” these businesses because of the cost of onboarding and account managers. “To have you as a client is an expense,” he said. “If you’re not making a lot of money for them, it’s not worth having.”
The company’s latest round was led by the sovereign wealth fund Mubadala Capital. Its existing investors Stride, Ada Ventures, Hearst Ventures, Episode 1, and Maersk Growth joined the round, bringing Huboo’s funding to date to nearly £80 million, or about $108 million.
Convincing VCs to invest was a “ridiculously” hard sell at first, Bysh said, as the world is increasingly software-defined. “They look visibly shocked when they walked out of the warehouse,” he said, adding that the Series B was much easier to raise than earlier rounds.
Huboo said it would use the fresh cash to double down on its European expansion. Huboo is set to launch in Spain next month and in Germany by the end of the year. The company aims to enter 10 additional markets next year.
Bysh expects its headcount to increase to 500 from 200 by the end of the year and to 2,000 by the end of 2022. The company is also building out its software platform with a suite of e-commerce features to help clients manage sales and launch online shops.
See the pitch deck Huboo used to raise the cash below.