Real business story

Your story, not your timing, is key to securing funding

When many business owners are starting out, they’ll often need access to funding in order to scale operations and meet the demand for products and services.
Martin Bysh, Huboo

Martin Bysh believes in finding investors who are aligned with your company’s values

While there isn’t necessarily a right time to apply for funding, you can put it off for too long. Having a compelling story can be key to attracting interest in your business.

Seek investment that suits your growth

For businesses looking to scale quickly, venture capital (VC) is a common route to take, as was the case for Huboo. The company has swelled from just two part-time employees since launching just under two years ago to more than 300 members of staff.

At the end of 2020, the company announced it had secured £14m in Series A funding, having already raised £2.1m in seed funding. Previous investors include Maersk Growth, the shipping giant’s corporate venture arm.

Like many young businesses with growth potential, Huboo has found itself running out of cash a couple of times. The financial injections, without which the business may have had to dramatically scale back, has meant that the company can work towards scaling its technology and ecommerce fulfilment operations.

According to Huboo’s co-founder and CEO Martin Bysh, VC is ideal in this situation, because while you may give away equity, the sizable investment you can receive can reduce your risk and allow you to focus on scaling.

“You need to find investors who are aligned with your company’s values,” said Martin.

“Don’t be six years in and have had a model of growth and then seek investment."

Martin Bysh, CEO, Huboo

Capitalise on opportunities

Ecommerce fulfilment can be a complex process for many SMEs. Huboo was established to “attack a market that really wasn't very well served,” said Martin, adding that the majority of small ecommerce businesses struggle to find a suitable fulfilment company.

He explained: “Big fulfilment companies don’t want to work with ecommerce businesses unless they’re shipping lots of items or expensive items. So, we went after the market that nobody else wanted.”

Having identified a gap in the market, the VC funding has been crucial in order to capitalise on the opportunity. The Series A funding is being directed towards software development, expanding its UK operations – Huboo has four warehouses in the Bristol area – and establishing a presence in Europe. Its first base on the continent opened in the Netherlands in March.

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Taking advantage of an opportunity means there’s no right time to seek funding. Martin explained that while the coronavirus pandemic wasn’t necessarily a big factor in deciding to raise funding when they did, doing so has allowed Huboo to accelerate its operations and capitalise on the pandemic-driven boom in ecommerce. From May to December 2020, sales were ten times higher than the same period in the previous year.

Don’t leave it late

Whether you’re planning on going down the venture capital route, getting angel investment or crowdfunding, investors are often looking for a compelling story.

For this reason, it isn’t a case of when to get investment, but whether you have a story and model of growth that is attractive to a particular type of investor.

“If anything, don’t be too late,” said Martin. “Don’t be six years in and have had a model of growth and then seek venture capital investment, because venture capitalists want things that have got rapid growth [ahead of them].”

  • location: South West (England)
  • business type: Transport & storage
  • business size: 250+

Top takeaways

Companies with ambitious growth plans need plenty of cash in order to realise ambitions.

There isn’t really a right time to apply for funding, just like there’s no real right time to launch a company. If investment can help take your business to the next stage or capitalise on an opportunity, then raise or apply for it.

Growth is great, but have a compelling story and relate it to your audience (ie. the investors you’re pitching to).