Trouva’s journey to series A
At LocalGlobe, we like to take our investments on a 18-24 month journey from seed to series A. However, of course, things don’t always go according to plan at this stage (at any stage?) and some companies take more time to find the winning formula. A longer journey is not necessarily a negative sign as it can result in stronger foundation. Trouva, which announced their $10m series A led by BGF this week, is a good example.
Their journey from seed to series A is worth sharing (with their permission) as I think it tells a lot about the quality of the team and is a great source of inspiration for other founders.
I first started to work with the Trouva team early 2014 after Robin led the Index/LocalGlobe seed investment. They already had their vision to bring the long tail of independent shops and their local inventory online by combining an easy to use ERP for stores and a consumer marketplace. They quickly realised that providing a tool for all independent shops while building a consumer brand and generating demand was hard.
I remember summer 2015 as a low point in terms of team morale. After a board meeting with some “tension” and frustration, we headed to a Pub and had a great chat. You could feel that they still had so much fire in them but hadn’t found the right formula yet. That year, they re-focused the business, spent a lot of energy talking to their best stores, refined the proposition on both sides of the marketplace and rebranded the business (this sounds quick and easy but it was an intense process). Very quickly the numbers improved significantly. After a few a months, it became clear they had found something that worked.
What’s been impressive since then is their ability to push for growth while continuously improving their KPIs and unit economics. They grew by attracting more clients, increasing the conversion rate and basket value, improving the repeats while bringing down the CAC. Today, they have built a fast-growing consumer marketplace with very solid fundamentals. With their combination of brand, community and unique inventory, they are one of the rare online retailers that can afford to not be too scared of Amazon (as one of our founders says if you’re not competing with Amazon, you’re probably in the wrong market anyway). Like Shopify or Etsy, they are bringing a long tail of hard to find products online. By carefully selecting the stores, they are also heavily curating the products that make it on their platform. For stores, their proposition is extremely compelling as it includes a full range of services: they give you an online presence (and hence an international customer base), generate demand and handle payments, logistics and customer service. For many shops, the income from Trouva covers at least their monthly rent allowing them to not worry about their biggest fixed cost and do what they do best: discover & curate products.
This series A is just a fundraising milestone, it’s still “day 1” and they know it better than anyone. To build a massive business, they will have to successfully scale the supply and demand internationally, generate a lot of loyal customers and continuously increase their basket value. But they have built a solid foundation and sometimes it’s good to stop for a minute, celebrate the journey accomplished and then go back to work :)
Onwards.
