Firas Raouf
Why Companyon Invested in RoadSync
We are super excited about our recent investment in RoadSync's $5.7M Series A expansion round announced on April 1st, 2020. The investment was led by existing RoadSync investor Base10 Partners as the lead investor, and Hyde Park Venture Partners, also an existing investor, as a co-investor. This was one of those no-brainer deals that ticked all the boxes of Companyon's investment thesis and was the perfect debut deal for our new fund (Fund II). More on that later.
Let's start with the basics of RoadSync. RoadSync is an Atlanta-based digital payment platform for the transportation industry. Its platform automates what today is a mostly manual, cumbersome, and very paper-based workflow for managing various payment methods between disparate transportation players across geographies.
It always amazes me that the world still has pockets of industry where efficient automation is lacking. The US transportation industry is a $700B industry with hundreds of thousands of businesses including trucking, warehousing, brokerage, and services companies. These businesses routinely invoice with paper and accept paper payments - like cash and check. The industry even has its own specialized paper check product, fleet checks.
Sixty percent of small trucking companies use paper invoices and 60% of logistics businesses report getting paid in paper checks. In the day where my 12-year old son routinely uses Apple Pay and PayPal to buy and sell stuff online.
RoadSync provides a SaaS platform that begins to automate transactions between shippers who coordinate cargo shipments, brokers who facilitate the haul contract, truck drivers who deliver and pick-up the cargo, warehouses that load/unload the cargo and store it, and the service providers that support them (truck tow/repair, fuel, etc.)
Ultimately, RoadSync's aspiration is to become the de facto financial platform for this massive industry, driving a network effect to deliver value in two ways:
Leverage automation to make financial transactions seamless, efficient and transparent, with the added advantage of making the flow of money faster especially for truckers and small business service providers.
Leverage RoadSync's growing trove of financial data for analytics and insights to optimize their clients' financial performance and operations and provide industry-wide intelligence.
How RoadSync Fits our Investment Thesis
Companyon invests in capital-efficient B2B and B2B2C startups at the post-Seed/pre-A stage. We look for companies that have found product/market fit with high-growth revenues between $1-3M, referenceable customers, a differentiated solution addressing a large market problem, and most importantly, a capital-efficient distribution model.
RoadSync met all of our investment criteria and then some:
Proven product/market fit after several years of fine-tuning its offering and evolving it from a point solution to a comprehensive platform.
A proven and experienced leadership team that took the baton from a founding team in order to begin scaling the company to the next stage of growth.
A capital-efficient distribution model and strong customer satisfaction and transaction volume growth.
A differentiated solution addressing operational inefficiencies in a very large market that is underserved by technology.
Existing investors who are bullish enough about the prospects of the company to lead this investment with the majority of the capital.
RoadSync's CEO, Robin Greg, favored Companyon as a co-investor because of our B2B expansion stage software company expertise and our value-add Platform Team.
As an added bonus, RoadSync's solution has been proving quite valuable in these challenging times of Covid-19. By automating the financial transactions for truckers and warehouses, RoadSync is providing a layer of protection against the virus by limiting the amount of physical interaction between the people involved in keeping our supply chain humming.
Firas Raouf is a General Partner at Companyon Ventures, funding B2B software startups into their expansion-stage by injecting decades of startup and VC experience through operational hands-on investing. The Boston-based firm leads post-seed, pre-expansion rounds in capital-efficient startups across North America that are ready to scale. Companyon's capital and expertise help scale portfolio companies into a supersized Series A or non-dilutive growth. The firm invests in startups with $1-3M in recurring revenue aiming to scale by 2-3x in the first year with help from its growth-ops Platform Team that offers experience, tools, and playbooks used in top-performing software startups.
Why We Invested in Apty
Why We Invested In Ziflow