Why We Invested in Iron Sheepdog
We are excited to announce our latest investment in Iron Sheepdog, an innovative platform that helps contractors, brokers, and haulers manage dump truck hauling services. Grand Ventures invested in its Series B round alongside SJF Ventures, Supply Chain Ventures, and others.
Several factors helped us build conviction in Iron Sheepdog and the team. Here are the highlights:
Founder-Industry Fit
Due to the complexity of the supply chain market, we have found that backing companies whose founders have direct experience in the industry is a key differentiator. Iron Sheepdog founders are perfect examples of this, having been in construction for over 20 years. They have deep industry knowledge that gives them a truly unique understanding of their customer’s pain points which allows them to be customer-first and build a product that addresses the complex relationships between all stakeholders. We couldn’t be more excited to back them and for what the future has in store for the whole team.
Network effects between existing players
Because margin pressure is such a common issue in supply chain, we have seen so many startups and new entrants try to address the problem by replacing the middle-man, the brokers. However, in an industry where trusted relationships dictate the success of the business interactions, we believe in Iron Sheepdog’s approach to selling into brokers and making their business run more efficiently, versus trying to replace them.
By creating a strong network of vetted market leading brokers with great reputations, Iron Sheepdog attracts the most reliable contractors on the platform, and therefore sub-haulers looking for stable work. Because of this win-win-win scenario, all these players then play a key role in introducing additional stakeholders to the platform, creating a competitive flywheel approach.
Strong reference and customer calls
Customer and reference calls are a key component of our due diligence process, and we were impressed by some of the things we learned from them. Ultimately, groups working with Iron Sheepdog raved about three things:
1) User friendly platform: Despite the tech complexity on the backend, the team focused on building a platform that does not require a lot of onboarding or training. It’s meant to be simple to focus on their customers, without adding complication to their already difficult and legacy world.
2) Efficiency through online processing: Since most of the industry is offline today, Iron Sheepdog helps increase the broker’s business performance by bringing their systems and processes online, resulting in doubled or tripled revenue in some cases.
3) Visibility into their finances: Through the platform and the Early Pay feature, both brokers and sub-haulers are able to easily see where they stand every day from a financial perspective and can access funds in near real-time as jobs are completed.
I’m excited to work with the Iron Sheepdog team and SJF Ventures through the next chapters of the company. As always, thanks to everyone involved in this process. First, Nicholas Cohn for sourcing and partnering with me during the due diligence, and helping with this blog. Second, the entire Grand Ventures team for driving challenging discussions that allow us to make informed decisions. Cheers!
