Let’s make hardware companies as scalable as software companies. — Our investment in Treyd.
I’m very glad to announce Zenith’s investment in Treyd as we are joining them on the journey of giving companies with sale of physical goods the option to “sell first, pay later”.
One of the main problems for a fast-growing company with physical products, like an e-commerce for example, is the cash flow nightmare related to production. First you pay your supplier 30% at order, then 70% at shipment and then your products sit on a boat for 5–8 weeks (if not getting stuck in the Suez Canal) before you can start selling them and generating revenues so that you can place your next production order. Hence, your growth acceleration potential is capped. Having experienced this firsthand in my previous ventures and via our hardware producing portfolio companies, Treyd’s solution really resonated with me from day one.
Treyd’s vision is to make hardware companies as scalable as software companies by providing production financing via a “sell first pay later” or the more famous “buy now pay later”-model. Treyd offer flexible 120 days order financing in a way traditional banks don’t. The big banks’ supply chain financing solutions don’t apply to fast growing younger companies and suppliers certainly aren’t generous when it comes to payment terms and credits if you don’t have a very long financial history and a decade old relationship with them. Plus, if you want to go for the traditional alternatives, it is far from a smooth journey.
To quantify this problem, there are approximately 800k fast-growing importers around the globe in the segment of annual imports between $100k and $10m per company. This segment is pretty much overlooked by the banks when it comes to smooth order financing. In Europe alone, the number of importers in this segment amount to 130k with an aggregated annual import value of $180bn.
But how can Treyd offer a smooth and attractive alternative to these importers? By connecting to the buyers ERP system, transaction data and historical financials, Treyd can assess the risk in a much more granular, automated, and real-time data-based way. Hence Treyd can provide financing to companies that show a strong sell-through rate of products, might already have customer orders in the system that are waiting to be fulfilled etc. Treyd also offers a QA (Quality Assurance) service that makes it possible for the buyer to get QA integrated in the financing of the order and for Treyd to know that the goods are of good quality and will be sellable.
We first got in contact with Treyd at the end of 2020 and got to know founders Peter, Sameh and the growing Treyd team during 2021. Peter who has run startups before and is an ex-management consultant, has an exceptional drive and knowledge of the market and Sameh is a serial entrepreneur with an exceptional tech brain. Just backing the two of them, with their complementing capabilities and diverse perspectives, was enough for us and combining that with a huge market opportunity, a great solution, solid tech and an attractive and scalable business model, it was a slam dunk to support them in their series A. Doing this alongside fellow investors like Nineyards Equity, J12, Antler and a number of prominent business angels is a pleasure.
Treyd is currently in blitz scaling mode and is set to keep this trajectory for the foreseeable future. The SEK 100m series-A also enable a heavily increased credit line making Treyd set up for the growth journey ahead.
Now that product market fit is proven, the top priorities going forward are scaling, building out the team, expanding the product and entering new markets. Since the closing of the series-A Treyd have already entered the UK and the Finnish market. Several new talents are already signed and this year alone, the team is set to double to triple the headcount. So, if you are looking to join an exciting journey, look no further.
This will be an intense ride. And we are very much looking forward to be part of it. :)