A portfolio company story: Explorate
Disrupting an old-school industry comes with its fair share of challenges and for importing/exporting businesses, achieving greater efficiencies in logistics and supply chain management doesn’t make it near the top of the priority list.
After raising initial funds from friends and family and operating for 2.5 years with limited growth, Explorate Co-Founders, Alex Ewart and Conor Hagan, pivoted their business model, developed product-market fit and expanded their network.
This is a detailed look into Explorate’s journey before, during and after the Skalata Ventures seed investment program.
How it all started
Founded by Alex Ewart and Conor Hagan, Explorate is a digital freight forwarding platform set to disrupt the age-old trade of logistics.
Alex and Conor met when they worked together at a global transport and logistics company. During that time, they realised that they shared a frustration with the lack of innovation in a very traditional industry and decided to establish their own business.
Initially, the concept for Explorate was to provide a SaaS platform for those looking to book ocean freight. For a monthly fee, those looking to book ocean freight could login and access a service (similar to Expedia) that would allow users to view a range of options to book ocean freight including departure depart, voyage duration and price.
Applying to Skalata Ventures
By the time Explorate applied to Skalata Ventures they had been working on the concept for 2.5 years and were struggling to grow. Their monthly revenue was nominal and the team was becoming increasingly frustrated with the lack of progress. They had raised money from friends and family and invested a considerable amount of their own time (and money). Alex and Conor were aware that they could not maintain the status quo and that something had to change.
Enter Skalata Ventures
Over the course of the seed investment program, Explorate evolved from a startup with a great founding team but very little momentum, to a business with a clear vision, product-market fit, rapidly increasing revenue and a growing team. Highlighted below are a few accomplishments made by the team during the program.
Major Accomplishments
i. Developing product-market fit and a sustainable business model.
Upon entering the program Explorate was paired with Ying Wang as their coach who identified immediately two key barriers to growth:
a. Their customers did not want to engage with their product as they were currently selling it.
b. Their pricing model did not reflect the value that they provided to customers.
Logistics is, widely speaking, an incredibly traditional industry. Customers booking ocean freight are used to a disconnected legacy system where they provide their shipping requirements to a freight forwarder and the freight forwarder organises and books the freight.
One of the issues with this is that too often freight forwarders don’t provide the best priced options to their clients as they receive incentives from different shippings lines, based on volume. The opaque nature of the industry means that these clients never realise how much cheaper their booking could be or how much more efficient their inventory management could be with shorter or longer voyages.
In the beginning, Alex and Conor were asking their customers to change their behaviour and book their freight requirements themselves using the Explorate platform. Upon realising how difficult it was to inspire behavioural change in an age-old industry, Explorate pivoted their business to make it easier for the customer. Explorate became a digital freight forwarder.
Their revised booking process sees clients providing Explorate with the same information they would to their incumbent freight forwarder before Explorate makes the booking on their platform. Since Explorate’s platform is able to sort options by price and voyage departure/arrival dates, customers can achieve efficiency based on what is most important to them.
In the previous business model, Explorate would charge customers a flat fee of $69 per month to access the platform where they could make as many bookings as they wanted. If customers were making high volumes of bookings, there was no upside for Explorate. With their new business model, Explorate is able to capitalise on larger volumes of bookings.
The result?
· The business is evolving into a marketplace for logistics
· Explorate made more revenue from existing customers; and
· Explorate removed a barrier to obtaining additional customers and signed up many more
Overall, revenue started increasing and more resources could be deployed to improve the product and increase the sales team.
ii. Expanding the Explorate network
Once Explorate had its house in order they were far better placed to benefit from the Skalata Ventures network. One of the benefits of our program is that selected portfolio companies are invited to present to our board during a meeting.
Explorate was invited to present to the Skalata Ventures board who were impressed by Alex’s and Conor’s engagement with the program and the subsequent increase in financial performance.
Chairman Paul Little AO, who built the Toll Group from a small business into a global giant which sold to Japan Post for $6.5 billion, was particularly interested in Explorate and invited them to meet with him on a regular basis — every 4–6 weeks. Paul invited colleagues from the logistics industry to attend these meetings and through them Explorate benefited from both the advice offered and the doors that opened for them (specifically, additional advisors and customers).
Explorate was introduced to, and signed, a number of customers that were introduced to them by the Skalata Ventures team and other portfolio companies including Brosa, Port of Melbourne and Port of Brisbane.
Summary
As a result of working closely with the coaches and coupled with the willingness to engage with the program, Explorate was able to build the business infrastructure required to grow. This work allowed them to develop product-market fit, a growth engine and a sustainable business model. Once the fundamentals of the business were strong, the networks available via Skalata Ventures were opened to them which further increased financial performance.
Explorate’s monthly recurring revenue grew 21x from May 2019 to January 2020.
“Skalata Ventures changed the trajectory of our business. Not only did the team provide us with high quality advice, they opened up doors into their networks and pushed us to develop a business with far more potential than we ever imagined. We’ve made more progress in the past 6 months than we did in the past 2.5 years”
- Alex Ewart, Explorate Co-Founder
We’re excited to welcome Explorate into the Skalata Ventures Alumni and look forward to watching them continue to grow.
Find out more about Explorate here.
Stay up to date with Skalata Ventures or apply for our 2020 program here.
