Making robots that make robots to take over the world

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Making robots that make robots to take over the world by Maggie Stamets originally published on TechCrunch

Nigerian B2B e-commerce platform Omnibiz raises millions to gain and retain retail customers

Africa’s informal retailers supply most of the continent’s population with a broad range of consumer goods and generate over $1 trillion in sales annually. However, troubles with outward inefficiencies and inward challenges have led to the prominence of B2B e-commerce startups across the region, which provide various tech-enabled solutions to address access to products and capital.

One of the players TechCrunch has featured in this space within the past year is Omnibiz, a Lagos-based B2B e-commerce and retail platform that connects fast-moving consumer goods (FMCGs) manufacturers to retailers by digitizing the supply chain stakeholders. Deepanker Rustagi founded the company in 2019 after years of running the now-defunct VConnect.

Omnibiz operates an asset-light retail distribution model. When a retailer makes orders on the Omnibiz platform, the goods are requested from partner distributors (traditionally known to help with warehousing and transportation) who store goods on behalf of manufacturers. With Omnibiz, these distributors can focus solely on warehousing and pass on the responsibility of transporting goods to third-party logistics providers, who distribute orders to the retailers within 24 hours.

Last August, the startup raised $3 million to expand into new markets within the country. The platform, which offers a mobile app, a WhatsApp channel, and a phone number that retailers can use to stock their shops, has since expanded its footprints into 12 cities across Nigeria while completing its first Pan-African move into Ghana.

“We have expanded in terms of the number of retailers,” Rustagi told TechCrunch about the company’s growth since its seed raise. “We’ve expanded in cities, geographically, and we have improved the overall system; the retention of the retailer, even with growing competition, has been phenomenal. And I think that’s what equips us for the next race.”

Different performance metrics drive B2B e-commerce platforms across the region — from gross merchandise volume (GMV) and the number of retailers to offerings and SKUs — as they try to set themselves apart. In Omnibiz’s case, it is optimizing for retailer loyalty, a perplexing feature in the B2B e-commerce space, but one Rustagi thinks his company has hacked.

Retailers in the FMCG space tend to be price sensitive. However, having the best prices as a B2B e-commerce platform doesn’t guarantee that these retailers will stay loyal. The statement holds more true now that FMCG and food prices in Nigeria have fluctuated immensely over the past few months. So, in addition to having competitive pricing, platforms like Omnibiz are pitching convenience as they partner with distributors to help retailers get their products — be it the fastest-moving SKUs or slow-moving ones that act as substitutes — in one place whenever they need them.

“If a retailer has to buy groceries for the week or month, and one of the products is cheaper on a platform, they wouldn’t want to increase their workload of buying from multiple places, procuring and delivery, said Rustagi. “They want all the prominent milk brands, for instance, [to] always be available. A retailer that rests assured that everything he buys is available can ignore a little bit here and there on the pricing. That’s, I think, what we feel about how to build retailer loyalty.”

According to Rustagi, Omnibiz has strengthened loyalty among its retailers by assisting in other areas, including showing an interest in their long-term growth, providing working capital, and managing their stores and customers who come into them.

The platform’s bookkeeping solution — the MyStore app, which compares to the likes of Kippa, Pastel and OZÉ and allows retailers to manage their customers and inventory and access BNPL services — is behind this strategy. Rustagi argues that retailers find it challenging to manage bookkeeping solutions in Africa because the platforms are often not integrated with their procurement. As such, the amount of work required in bookkeeping is cumbersome for independent retailers unless they benefit from doing so; consequently, that’s where the MyStore app comes in, he said.

“We’ve integrated end to end for retailers. So there is no SKU creation, no pricing or price update, and no buying price and selling price. Everything comes based on the trend and enables retailers to manage their inventory and customers efficiently.”

The MyStore app, in addition to the primary Omnibiz Retail app, lets the company employ a holistic strategy to become the primary B2B operating system for retailers, enabling them with last-mile delivery, procurement, working capital, inventory management and operational tools for tracking sales, cost, prices and profit.

Omnibiz introduced the MyStore app last July to cater to retailers who are “loyal” to the platform, Rustagi noted on the call. There are over 3,000 of them. It’s relatively small compared to medium to large players in sub-Saharan Africa, such as Marketforce, TradeDepot and Wasoko, who report various multiples of that number. However, there are some nuances to how Omnibiz measures traction. According to Rustagi, these 3,000 retailers place orders on its platform daily (active daily merchants), whereas other players might provide overhead numbers of registered merchants. The chief executive provided additional context:

“In this business, you can’t choose a very high cash burn mechanism and still pursue a strong path to profitability. We are concerned about having the right volumes to make us grow into a stable, long-term and profitable business,” Rustagi said. “This has pushed us to focus more on retailers with the capacity and capability to grow but cannot do so because of challenges in their ecosystem. So we pick our retailers rather than working with every retailer in the industry. I think that’s how we want to create our impact.”

Omnibiz’s annual GMV of $130 million comes from these repeat retail customers. The company expects to increase the number of retailers on its platform to 10,000 next year. It also projects a 4x revenue increase for these retailers who connect with over 200 brands delivered by a network of more than 70 logistics partners on Omnibiz’s platform.

Its new round of funding will be pivotal to accomplishing these objectives, Rustagi said. Today, the B2B e-commerce company is announcing that it has closed a $15 million pre-Series A round ($5 million equity and $10 million debt) led by Timon Capital. Other VC firms such as Ventures Platform, Lofty Inc, Chapel Hill Denham, Chandaria and Musha Ventures also participated. Some of these investors took part in the company’s seed round.

Omnibiz said it will use the funding to double down on winning the loyalty of retail customers and driving their retention. The company also plans to begin its regional expansion this month into cities it cited during its seed raise last year: Abidjan, Takoradi, Kumasi and Accra.

Nikos Katsaounis, a partner at emerging markets VC Timon Capital, said his firm invested in Omnibiz because it believes the company is solving a much-needed problem. “The FMCG supply chain is fragmented, inefficient, and opaque. Omnibiz tackles all of these problems and addresses them with an efficient software layer that provides much-needed data on this otherwise obscure market and supply chain. Deepankar Rustagi is an excellent operating CEO.”

3 ways to optimize SaaS sales in a downturn

My first month with a sales quota was September 2008 — not the best month for a 21-year-old to start his career by cold calling strangers and convincing them to buy a $10,000 piece of software. The economy was in free fall, companies were slashing workforces nationwide and all budgets were frozen.

Against all odds, I ended up doing well. Well enough to be the best salesperson globally (out of nearly 1,000) and breaking the 10-year record for most sales in a single year. How? After working on the first Obama presidential campaign from 2006-2008, I had a fresh perspective on how to sell. One that works regardless of whether we’re in a bear or bull market.

There’s tremendous opportunity in a recession for growing revenue. But first, you have to fundamentally change the way you approach sales.

In a downturn, money saved is worth even more than money earned.

Here are some quick tips for founders and salespeople to help keep SAAS revenue growing during these tougher times.

Adapt your sales pitch to the current market

When capital is cheap, growth is the primary metric all executives and investors target. For the last decade, capital has literally never been cheaper.

All that has changed, though. Today, companies are unable to spend more than they make. That means that your old sales pitch of “We can help you grow faster than ever!” must change, too. The new message that will resonate is, “Let’s get more out of your existing resources!”

Flipping the sales script: How to break biases and diversify sales teams

Technology leaders don’t like to admit it, but sales has a perception problem that deters many fabulous candidates — especially women and minorities — from pursuing careers in tech sales. I’ve seen and experienced these biases firsthand as a woman of color in tech sales.

Unfortunately, some of the best salespeople are often deterred from the profession because of sales culture. There’s too much of an emphasis on “alpha male” personality traits rather than the soft skills that allow individuals to thrive. Sales leaders need to create a culture of success for all salespeople regardless of background.

The reality is that many go-to-market (GTM) plans are shifting to product-led growth (PLG). Putting the product itself in the driver’s seat means that the product needs to be easily accessible, well documented and usable without requiring “gatekeepers.” In this context, the role of sales changes from pushing products to enabling customers to make informed decisions.

Enablement includes everything from access to additional resources, volume discounts and navigating security, to vendor management, procurement and understanding product roadmaps. All this has less to do with selling and more to do with giving customers a well-managed buying process. Good tech salespeople enable customers to get the most out of their investment by giving a voice to their needs and concerns.

Extroversion, charisma and alpha personality traits do not drive sales success.

Substance over charisma

The charismatic alpha-male trope is a remnant of early technology sales days and is often depicted in television and movies. While it makes for good drama, it leads people who would excel in tech sales to think they don’t have the right personality for the job.

This is a major myth. Extroversion, charisma and alpha personality traits do not drive sales success. The real skill sets that make salespeople effective include:

  • Discipline and organization.
  • Intellectual curiosity.
  • Empathy.
  • Ability to navigate complexity and create clarity out of ambiguity.
  • Creativity and problem-solving.

These are gender-neutral soft skills that apply equally to introverts and extroverts. Unfortunately, the perception of sales environments deters many talented women from sales roles. Instead, they find comfort in marketing, accounting, finance and human resource roles, all of which have more defined playbooks with well-understood responsibilities.

Growing up enterprise for SaaS startups: 7 lessons on doing it right

Practically every software-as-a-service company wants to move up-market and sell to enterprises as well as to smaller customers. Doing so can lead to bigger contracts, more growth, and the kind of scale required to become a well-known technology name — think Workday, ServiceNow, Palo Alto Networks, or Snowflake.

Despite how well-trodden this path is, it’s a surprisingly difficult motion to get right.

In my current role as an operating partner at Battery Ventures, I field questions daily from companies with bottom-up sales motions — those focused on smaller customers who often buy software themselves — about how to make the jump into enterprise. The first thing I tell them is that moving up-market to the enterprise is a lot more complicated than they might think.

Unfortunately, a lot of founders make the mistake of thinking that hiring a bunch of highly paid account executives (a fancy name for salespeople) is the same as “going enterprise.” It’s not.

Moving up into the enterprise requires fundamental changes to every function in the company. It means hiring for new roles that don’t exist, and adopting tools that will match the new processes you’ll implement. New roles, tools, and processes means additional expenses.

So why do it? Because, when done right, the benefits outweigh the cost and complexity. An enterprise sales model allows you to widen your total addressable market and go after customers with better net-revenue retention and stronger long-term value.

Moving into the enterprise is tougher than it seems, and many companies aren’t ready to do it, especially in this market.

If you’re making your move into the enterprise now, the stakes are rising. Volatile tech markets and fears of a recession mean enterprise technology buyers may be even less likely to spend money on new, unproven tech in the coming months or years. So if you’re new to the enterprise market, you need to enter the fray fully prepared to do it right.

Key components of growing up enterprise include changes to your product, marketing, sales, legal, finance, HR, and customer success. I’ll give an overview below of each of these areas, and relevant considerations for companies thinking about diving in.

But first let’s assess your company’s overall enterprise readiness.

Note: This post is an excerpt from Bill Binch’s new e-book, “Growing Up Enterprise”

What does ‘enterprise readiness’ mean for your company?

First, ask yourself if any priorities rank above your move to the enterprise. Are you expanding globally? Are you releasing a new product (product, not feature) in the near term?

I’d strongly advise waiting on the enterprise motion until it can be your company’s highest priority — something that’s talked about in the weekly CEO staff meeting.

Why is this so important? Because enterprise readiness extends well beyond sales and marketing. Nobody wants sales and marketing to reel in a big-fish customer only to have the deal fall apart due to operational obstacles. Let’s run through a few common scenarios to illustrate how this can play out.

Tiger Global backs bttn, leading e-commerce infiltration of medical supplies

News stories over the past two years spotlighted the problems hospitals and other medical organizations were having in procuring masks, gloves and other essential medical supplies as hospital units grew crowded with COVID patients.

Bttn co-founders JT Garwood and Jack Miller heard the call and started the Seattle-based company in March 2021 after seeing the challenges medical organizations faced in not only finding supplies, but fair prices for them.

The company’s business-to-business e-commerce marketplace provides a variety of name-brand medical supplies, saving its customers an average of between 20% and 40%, while providing a better ordering and shipping experience.

“From a supply chain perspective, the pandemic was the peak of terribleness,” Garwood told TechCrunch. “There were a lot of backorders and huge manufacturers were out of production. We felt it was an opportunity to step up during a time of intensity to help practice owners save time and money and get access to products they couldn’t through their traditional channels.”

JT Garwood bttn medical supply marketplace

JT Garwood, co-founder and CEO of bttn. Image Credits: bttn

That work has paid off, he added, and customers are “coming back in droves.” Bttn’s marketplace now has more than 2.5 million products and continues to “rip-and-replace” the way healthcare distribution is managed.

The company, going after a U.S. wholesale medical supply market poised to be valued at $307 billion this year, has experienced hypergrowth since we profiled bttn’s $5 million seed round in August 2021. At that time, the company was working with 300 customers, including individual practices, surgical centers and over 17 healthcare associations across the country.

Today that number has jumped to 7,000 customers, including more than 500 healthcare practices that purchased supplies via bttn for the first time in April, Garwood said. During that month, the company added eight distribution and fulfillment centers. Between August and May, bttn also boosted its employee headcount to 75 (from 10) and grew its gross merchandise volume 1,000%. In May, the company reached a milestone of over 1,000 orders.

With all of that demand and activity, bttn is back with a larger round and a prominent lead backer. Today, the one-year-old company is back with $20 million in Series A funding, led by Tiger Global, that puts it at a $110 million post-money valuation. Fuse also participated in the round.

Garwood explained that going after new capital would give the company the runway to accelerate toward its mission of being the “preferred distributor for every practitioner nationwide and bring transparency to the whole ecosystem.”

“They get to use digital parts of the supply chain that they have never been asked to use before,” he added. “Now is an important time because the ecosystem is ripe for it. In addition, though funding markets have slowed, it is clear that companies with big visions and economies are getting funding and that is what we are all about.”

Garwood intends to use the new funding to continue to build and scale bttn’s employee numbers, focusing on improving the customer experience to remove the barriers for them to purchase faster and easier and reaching more customers.

Bttn also continues to work on distribution capabilities amid a consumer behavior shift of wanting packages delivered quickly. Over the past year, the company has been able to reduce shipping from between 12 to 21 days down to between one to five days nationwide.

“When we approached this large and antiquated market, we knew we could be doing more to help them and make an impact in so many of the different layers of the supply chain,” Garwood said. “Growing to reach them will be a challenge, but if we step up to the challenge and scale in a way we believe we can, that is what we are going to have to do.”

Indonesia’s Astro raises $60M to work on 15-minute grocery delivery

Indonesia’s sprawling archipelago has long been a headache for logistics companies, but there’s no lack of brave challengers. Jarkata-based Astro, which provides 15-minute grocery delivery, has recently closed a $60 million Series B financing round, lifting its total funding to $90 million since the business launched just nine months ago.

The Series B round was led by Accel, Citius and Tiger Global, with participation from existing investors AC Ventures, Global Founders Capital, Lightspeed and Sequoia Capital India. The company declined to disclose its post-money valuation.

The speed at which Astro is attracting investment goes to show the need for hefty upfront investment in the grocery delivery race, which is about establishing a logistics infrastructure quickly and locking in loyal customers ahead of rivals. Founded by Tokopedia veteran Vincent Tjendra, Astro plans to spend its funding proceeds on user acquisition, product development, and hiring more staff to add to its current team of 200.

As in many countries around the world, on-demand delivery got a boost during the COVID-19 pandemic in Indonesia. But e-grocery penetration in the country remains low and is estimated to be just 0.5% by 2022, compared to China’s 6% and South Korea’s 34% in 2020.

That means there’s a huge opportunity for companies like Astro that are trying to prove the convenience of online grocery ordering over brick-and-mortar visits. The e-grocery delivery market in Indonesia is projected to reach $6 billion by 2025.

Astro offers 15-minute delivery within a range of 2-3km through its network of rented “dark stores,” which are distribution hubs set up for online shopping only. The company has opted for a cash-intensive model, as it owns the entire user journey going from inventory sourcing, supply chain, mid-mile, to last-mile delivery. The benefit of this heavyweight approach is that it gets to monitor the quality of customer experience.

Astro currently operates in around 50 locations across Greater Jakarta, an area with 30 million residents, through a fleet of about 1,000 delivery drivers. Revenues grew more than 10x over the past few months and downloads hit 1 million, the company said.

The startup is competing with incumbents like Sayurbox, HappyFresh, and TaniHub to win over users. Its customers range from working professionals to young parents at home “who seek convenience,” said Tjendra.

Grocery delivery is notoriously cash-burning, but Tjendra reckoned margins will improve as the business scales. The company’s main source of revenue is the gross margin it earned from the goods sold and delivery fees customers pay. A large chunk of the business’s costs comes from delivery, which the founder believed “will come down over time as we deploy for hubs and subsequently reduce the delivery distance areas.”

As post-covid food distribution digitizes, Cerve raises $2M for wholesaler platform

As we found during the pandemic, food and beverage distribution is critical, but most food wholesalers’ sales remain manually operated.

Post-covid, food wholesalers are fast digitizing their operations, but many still rely on legacy backend systems.

Addressing this, Cerve, a Sweden-based food-tech startup, has raised a $2 million seed round for its infrastructure platform that claims to automate wholesalers’ sales operations. It does this by integrating into a wholesaler’s ERP providing a more tailored experience to buyers.

The financing round was led by Orkla Ventures, with MP Pensjon and nFront Ventures also joining the cap table.

Daniel Holth Larsen, lead investor from Orkla Ventures added: “Cerve hits the nail on the head with its proven value proposition and has the potential to truly change behaviors in B2B food industries. We look forward to supporting the team on their journey.”

Lucky is bringing brands, retailers together with its take on product merchandising

Shifting consumer buying behaviors means brands can’t only rely on selling via one channel anymore.

For e-commerce and traditional retailers looking at new ways to connect and engage with consumers, Lucky believes its approach enables them to work together to not only achieve that goal, but give consumers a better shopping experience.

The 1-year-old company was founded by Sneh Parmar, who has a background in consumer purchasing behavior, and Nafis Azad, whose background is in software UX and product development.

Parmar was buying a certain brand of charcoal toothpaste online and waiting a week to receive the package. While telling friends about it, they told him he could actually find it at Target.

“That’s when the lightbulb went off — why am I buying online and paying for shipping when I can walk two blocks to Target?” he added. “Nafis and I began trying to understand the relationship between retailers and brands, who are still competing against each other.”

They aimed to create something on top of retailers’ infrastructure so there is full transparency of inventory at a retail store, essentially optimizing the concept of “big box” for everyone, “to be wherever the customer is and providing a hybrid shopping experience,” Parmar said.

Now a team of six, Lucky’s first product is a plug-and-play API, also available on the Shopify App store, that integrates in minutes with major retailers — it is already working with Nordstrom and Sephora — so that e-commerce companies can gain inventory visibility of store shelves and offer local fulfillment options. For example, when someone orders a product online, Lucky will see if it is available from a local retailer and give the customer an option to either ship it or pick it up at the store.

As noted, Lucky is also using data to bridge the gap between brands and retailers, providing data-driven insights into real-time inventory distribution, discovery and how to merchandise brands in-store.

The company is already working with 10 brands, including men’s cosmetic/skincare company Stryx, where Lucky is integrated into over 10 of its SKUs.

After Parmar and Azad launched a beta pilot in the fourth quarter of last year, they saw a 10% engagement rate from consumers using Lucky. They wanted to scale via national distribution, and after securing partnerships with Nordstrom and Sephora, now have access to thousands of brands to be Lucky’s customers, but to get that scale would need to raise capital.

Lucky recently closed on $3 million in a seed round led by Unusual Ventures, with participation from Plug and Play Ventures and a group of angel investors like Alloy’s Sara Du, Pixlee’s Kyle Wong, Cremo’s Kyle Schroeder and NBA player Wesley Matthews.

The new funding will enable Lucky to build up its team on the engineering, product and sales sides, Azad said. The company is looking to boost headcount to 10 in the next two quarters and to bring on around seven new retailers by the end of the year. It’s also planning for some new features, including a better store locator and inventory tools and expanding fulfillment options.

Meanwhile, Rachel Star, principal at Unusual Ventures, understood what Lucky was aiming to do, having herself worked for Nordstrom on the corporate side. She noted that retail traffic has been down for about five years now, and the opportunity to bring people into a store, whether they ordered an item online, or wandered in, provides a meaningful brand touch.

“When you think about eight years ago, when direct-to-consumer brands really got started, it was a one-to-one relationship with consumers, but scaling became a challenge, so many opened retail stores,” Star added. “Stores like Nordstrom and Sephora act as aggregation points already, so when brands partner with retailers to get network density, it gives those retailers traffic. Even when returning something, people often buy something new. It’s a very cool combination where needs from both sides can be met.”

Azad mentioned Ulta placing products into Target as a way of gaining density, and when I saw that men’s skincare brand Lumin, which was exclusively DTC, launched last month in Target and Walmart, I asked general manager Kevin O’Connell why Lumin felt having a physical presence in stores was also warranted.

He explained that having items in a brick-and-mortar store “made a lot of sense” for the company’s growth strategy, though he said the company was not slowing down its online business. Lumin surveyed customers and found that it was convenient for them to buy products while they were already out shopping.

“We’ve been tracking our steady year over year growth over the past two years and have spent a lot of time analyzing data that showed customers in the market for men’s skincare products are most frequently making these purchases at larger retailers, specifically Target and Walmart,” O’Connell added. “And of course, partnering with well-known names like Target and Walmart provides a valuable opportunity for us to further build our brand and expand its reach to new customers that are active in-store shoppers who may have previously been unaware of your online presence.”

Use RevOps to develop a customer-led approach to B2B sales

The media is abuzz with articles telling us how to improve B2B sales, but at the same time, we also see headlines like “The end of B2B sales.” Who’s right?

What’s clear is that there’s no more room for traditional B2B sales. In a recent survey, 43% of B2B buyers said they would prefer a buying experience that had no reps involved at all. Yet, sales reps are stubbornly advised to “present your product better,” “ask open ended questions,” and “sweeten the deal.”

You’re trying to make the customer fit your product’s mold rather than making your business and services fit the customer’s mold. In a world with countless competitors, the customer no longer needs to adhere to your process. The tables have turned, and sales teams are realizing they need to get the customer exactly what they need, when they need it and in a way that fits their buying process.

Putting the customer first was always the domain of B2C. But why? The person on the other end of a B2B call is a human, too.

In this sense, B2B is actually becoming a lot more like B2C. We can’t continue using cookie-cutter solutions that hardly change whether you’re selling enterprise software for health tech or retail solutions. Each business should figure out what is best for their clients and trust the direction that leads them in.

For a financial services company, the solution might be putting all their products on a virtual marketplace and minimizing customer contact with reps. For a retail solution, it may be getting on the phone with a shop owner and customizing the tools to their particular model.

So what is the common factor here? Optimizing your unique path to better connect with customers requires having a cross-discipline team that’s focused solely on that objective and sees the client as their guiding star. We call that RevOps.

How tunnel vision in sales ops left the client behind

Back around 2010, the thinking was, generally: “Let’s bring tech into our business and make it more efficient.” The problem was, many companies used that tech to improve their existing processes, rather than craft better ones.