The Home Depot Acquires dunnhumby Ventures Portfolio Company, Askuity
I am very happy share that Askuity, a company we first invested in in early 2014, has recently been acquired by The Home Depot. Their story is a great example of a startup adapting to change and seizing opportunity.
In our initial investment memo, we wrote the following:
“Askuity takes a mobile-focused approach to retail supply chain collaboration. The company’s “Retail Intelligence Platform” allows retailers to automatically share POS and inventory data with vendors. This data sharing improves collaboration, execution and decision-making along the retail supply chain”
It turns out we were right. However, the path to this was not linear, it was a circle. Shortly, after launching the product to market, it became apparent that selling a “Better” vendor collaboration platform, directly to retailers, was not working. Sales cycles were too long and the switching costs too high. They had their own systems, which consisted of an Excel file, EDI feed, or legacy vendor portal. In fact, almost every retailer had a different method of sharing sales and inventory data.
This insight is what led them to adapt their business model and go directly to the vendors themselves. The pain point was clear; how can you act on this data, if all your retailer data feeds are in different formats? Askuity’s offering pivoted. Instead of trying to sell to the retailer, they began selling directly to the vendors. “Give us your disparate data feeds, we will normalize them and provide you a holistic view of your sales and inventory data across your retail partners.”
This is where the experience of Eric and Neal, who were both early employees through IPO at Workbrain, benefited the entire team. They were calm and methodical in how and why they made decisions, even when the board would disagree. For instance, they latched on to the home improvement sector, early on. Myself and others would urge them to go after different verticals, where there was more money and more opportunity.
It turns out that this sector has significant advantages that Askuity was able to leverage. The vertical was largely untapped by their competitors, they had a few early wins they could build case studies around, and they were able to gain expertise into the data formats of a small group of retailers who these suppliers sold through. One of those retailers was The Home Depot.
Once Askuity had dozens of The Home Depot’s own vendors utilizing their platform, showing them the benefits of “Improved collaboration, execution and decision-making along the retail supply chain” became easy. In fact, it was so compelling that The Home Depot felt that it was a competitive advantage to own this solution, bringing their journey full circle.
The Home Depot are getting a tremendous team and technology that I am certain will contribute to their continued success.
It was a pleasure to be able to work alongside Eric and Neal over the past 4+ years, in many ways coinciding with my own growth as an investor and board member. I have no doubt that all current and future portfolio companies are benefiting from some of these experiences today. I can’t wait to see what their next journey, at The Home Depot, brings them.