Transportation services in the Brazilian market are very fragmented, with over 70,000 logistics companies registered at the National Transportation Agency. Unlike in the United States or Europe, shipping across the country is a hassle since there aren’t a lot of comprehensive cross-country providers with transparent processes for pricing, standards and tracking mechanisms.
Intelipost, a Brazilian transportation service platform is set to change that by providing SaaS solutions for managing logistics providers under one roof.
“If you are a shipper, e-commerce retailer, or a wholesaler in the industry, hiring and managing logistics providers could become difficult,” explains Gabriel Drummond, co-founder of Intelipost. “We provide a platform to integrate all providers so that it becomes a lot simpler and cost-efficient to look at logistics.”
The idea of Intelipost was born inside a VC fund named Project A Ventures, which is based in Berlin. Stefan Rehm, the other co-founder of the startup was working on the VC fund in Brazil, managing a couple of e-commerce ventures in the country. The situations that arose during the management of internal logistics providers made him realize how disoriented the whole industry was, leading on to the founding of Intelipost.
To create a peerless solution, it was crucial for the startup to work on bringing an end-to-end solution that was SaaS-based, which was also flexible and easy to implement. “When you talk with larger e-commerce companies, they look at the possibility of having a Return on Investment (RoI) on the second month of working with us. This is better than a year-long cycle of an SAP project, which also involves them investing a few million dollars on the product,” adds Drummond.
Intelipost also does not believe in competing against startups looking to develop digital freight marketplaces or creating a platform where truckers and shippers can interact transparently. The company works towards smoothly integrating its solutions with such startups like yet another transportation company
The operations involved in creating a perfect solution is complex, and Intelipost had to contend with a variety of processes before it hit the market.
“Managing freight needed a lot of attention. First, you need to quote and select the provider you want, based on pricing, historical service levels, delivery time, and so on. Next, comes the actual hiring and tracking the service. The final steps are reverse logistics and auditing,” explains Drummond. “When Intelipost hit the market, we started with only the features of selecting providers and real-time tracking. But this was something that nobody offered back then. These were the basic tools that a medium-sized e-commerce company needed.”
Over the years, Intelipost has grown tremendously, and with it, the target audience for its product also evolved. Initially, the startup had a lot of leads pouring in from small e-commerce companies and months went by with them trying to serve everyone who chose to be a customer. But slowly, a visible caveat started sinking in between the smaller initial customers and the larger companies – with a thousand-fold difference in monthly remittances.
“Though there wasn’t a shift in our services, we started targeting larger companies as time went by,” says Drummond. “We had a lot of small clients which forced us to raise the initial pricing for us to focus on mid-sized and large companies. This was because it required a lot of effort on our side to integrate into their systems and make sure everything worked smoothly.”
The feedback on the services have largely been positive for Intelipost, says Drummond. Interestingly, client companies have grown in value over the three years of association with the startup, and thus their needs have also enlarged.
“Initially, our customers used to ship 3,000 orders a month, but now they are taking over 100,000 monthly orders. They’ve grown from having a single warehouse to having three warehouses now,” notes Drummond. “We now have very large distributors working with us. Based on their needs, we are looking to develop a fully automated freight audit module now, which was not in the preliminary scope of our business. Developing the service is vital because the Brazilian tax norms are complicated and it also helps with improving our customer experience.”
As far as the traction goes, understanding the sales cycle took some time to figure out, adds Drummond. “Because we sell to large clients, our cycles are very long. So, the time for a lead to become an opportunity and for it to convert into a running client takes six months to a year on average.”
Intelipost’s initial development has been done keeping in mind its international scalability prospects. Having an annual recurring revenue of $3 million with minimal churn rates and having achieved break-even, Drummond is extremely optimistic about the future. “We have been profitable over the last few months,” he concludes. “We would be going for our Series B round early next year and are trying to get foreign investors on board to eventually help us in scaling up internationally.”
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