Tennders x GrowthX

Acquisition

Goals:

1. Product: Logistics SaaS and associated services like transportation of goods in FTL/LTL, insurance, brokerage, vendor validation and financing.
2. Users: Logistics operators, brokers, truck providers and owners
3. Market: European International logistics (1.2T EUR)
   Road transportation segment of logistics (400B EUR)
   Urgent shipment (80B EUR)
   Digital- SaaS, MarketPlace, FMS, TMS (2B EUR)

1. Product: SaaS that helps companies negotiate deals between load providers and truck providers.
   Internal Marketplace: software allows negotiations inside a company between different countries, departments, dedicated providers, partners and brokers. Highlight: Multiple negotiations take place almost always.
2. 1. Case 1: Find a load of 13.5T (FTL) for an available truck at Location A. Make offers to the load providers, and negotiate in real time to confirm shipment.
      Workflow: Input 'Location A' on Loadboard, and date of shipment. Pick a load that matches the requirement (pick up = Location A + 200km, delivery = Location B, goods type, target delivery date), and give a price/quotation (in price/km) to deliver the load from Location A to Location B.
   2. Case 2: Find a truck (with truck type) available at Location A (or, in an 'X' kilometre radius). Make/counter offers to the truck providers, and negotiate in real-time to confirm transport.
      Workflow: Input Pickup and delivery locations (with dates), type of goods, payment terms along with some optional details like type of truck and target price/km. This will post the load available on the load board for truck providers to make you an offer. Meanwhile, it will list all the trucks that have been reported to be available at Location A (or, in a 200km radius).
   3. Case 3: Hire a broker to find a truck or a load, this is a specialised service that connects you to various brokers in brokerage companies and freelancers.
      Workflow: Post your truck or load requirement, and share it with the community marketplace.
   4. Case 4: Generate documentation based on a deal made between load and truck. Organise payment terms.
      Workflow: Upon closure of the deal, incoterms and order documentation are mandatory documents to be provided specifying the order number, pickup warehouse, delivery warehouse, dates of pickup and delivery, type of truck expected, quantity of goods, type of goods, etc. This is auto-generated by the systems based on data provided while missing information is required to close the deal.
   5. Case 5: Post to external marketplace providers.
      Workflow: This lets a user post their requirement to other providers outside their internal Marketplace (i.e. to all companies using Tennders SaaS as an Internal marketplace consumer or an affiliated user)
   6. Note: Posting an available truck or load can be done in bulk, i.e. a tender requirement listing availabilities of loads or trucks can be posted for receiving quotations.
      Workflow: Upload an Excel listing mandatory information like pick up and delivery locations, dates of availability, payment terms, target price, and repetitions.

External Marketplace: This is a community space that can be used by companies that own a unit of Tennders SaaS, or paid marketplace users.
SaaS allows the internal operations team, their partners, brokers and providers to participate in negotiations. (note: each entity has an admin system that allows them to limit engagements of users with internal, or external users)

Workflow: All companies have access to the external marketplace but with limitations on number of posts per day, deals cleared, etc.

Value system: Each entity generates a huge amount of data on pricing, shipment availabilities of loads and trucks, financial/cashflow stability and trust ratings.
Core features: Pricing insights, trust score, payment reliability, re-financing.

Goal of product: digitize all companies that are directly or indirectly associated with Tennders via either logistics operation or SaaS.

Insights:

Average shipment price (AOV): 1,287 EUR
Average SaaS price: 20,000 EUR

Average distance: 1,000 KM
Average brokerage: 150 EUR/shipment

Average empty KMs: 70km

No of loads moved each month: 500-1200

No of load providers (companies): +200 regular (every month or tendered), +350 intermittent(urgent needs)

No of truck providers (companies): +300 regular (every month), +2000 intermittent(urgent needs)

Peak truck posting hours: 7.30h CET - 9.30h CET
Peak load posting hours: 8.00h CET - 11.00h CET
Peak booking success: 8.30h CET - 9.30h CET

2nd peak booking success: 15.30h CET - 17.30 CET

Average number of negotiators per shipment: 6 (max= 22 in less than 1 minute)

2. Users: people who work on domestic or international trade of goods for FTL- full truckload primarily (sometimes with LTL - less than truckload). These users work in:
3. 1. Goods-producing companies
   2. Logistics brokerage
   3. Truck operators
   4. Dedicated transporters for FMCGs, global logistics providers

User group: Load providers, Truck providers, billing associate, tracking associate, finance

ICP- 1: Truck provider, responsible for finding loads for trucks.

• Name: Carlos Blanco
• Description: Carlos is a graduate of logistics school and is interested in learning more about the supply chain. His parents own a small logistics company that assists truck companies in negotiating tenders for regular shipments in the ES-FR-ES, ES-UK-ES corridor. His goal is to reduce empty KMs for the trucks while keeping a 5% margin on all the deals.
• Demographics (age, gender, location, etc.): 26 years of age, male, Zaragoza, Catalunya, Bachelors degree, logistics operator.
• Customer needs: He wants to make sure trucks that are dedicated to his fleet do not sit idle, and get them regular customers (preferably the same routes). He wants to find round trips for trucks so that their trip starts on Mondays and ends on Fridays, so drivers can spend weekends with their families instead of on the road (this will also save him time on weekdays for documentation and billing)
• Motivations: As a sales operator, he enjoys the thrills of negotiation and urgent shipments that make him hundreds of euros per load. He wants to relax and enjoy the weekend with his 2 dogs and girlfriend at his village home.
• Pain points: Missing documentation like order confirmations, customs clearance, lost CMR . Additionally, tracking of shipments, warehouse location and timeslots, and payment collections. Back-to-back trips often fail because of delays during loading/unloading at the warehouse.
• Their journey through your customer cycle: Every morning they will list all the trucks available on their whiteboard, based on which they will start calling load providers and spend the next 2-4 hours calling people in their network (customers/shippers/brokers) to ask if they have a shipment. They will try to negotiate deals like this throughout the week trying to book shipments for this week and organize next week's loads while also keeping a % margin. In desperate times, they not only lose their margin but pay from their own pockets to ensure a truck is moving due to said commitments to book the truck and high empty KM between the last delivery to the next pickup. 2

ICP 2 - Load provider, responsible for finding trucks for loads

• Name: Maria Jose Alvarez
• Description: Maria is a graduate in business and operations working for Nestle as a logistics manager. She leads the transportation of Nestle's Fererro, at Spain(Tarragona) and the Netherlands(Rotterdam) ports organizing trucks for moving shipments to and from these ports.
• Demographics (age, gender, location, etc.): 34 years of age, female, Belgian, speaks French, Spanish, Deutsch and German Deutsch.
• Customer needs: She wants to make sure all shipments of Ferrero must not be stored at port storage for containers for over 2 days after customs clearance. She has a fixed budget for every quarter to move all shipments to their respective countries in West and Central Europe. She has a team of 3 operators who are constantly negotiating deals with truck companies. The goods value in each container is usually over 100k EUR so it requires special insurance for the truck to take the load, and each day goods sit at storage, her department pays 300 EUR. Her goal is to reduce the costs of shipping the goods to get a bonus incentive.
• Motivations: She enjoys her work and wants to head logistics for other divisions of Ferrero. Bonus/incentives are the amount of savings she and her team make each quarter.
• Pain points: She hates to be unaware of the shipment, and wants continuous tracking and updates. Last-minute cancellations of trucks cost her department 300EUR per day and loading charges of the port. She must receive the original CMR(bill of lading) document along with the invoice to proceed with the payment process. Her company's payment term is 45 days from the day of invoice arrival, while truck companies want payments within 30 days.
• Their journey through your customer cycle: She uses Nestle's digital tools to coordinate and plan shipments, and the same is used within her team to organize trucks for the shipments. Since the truck companies cannot use the same tool, she organises the same data in Excel and shares it with her team every day for planning and execution. She spends each morning collecting data, copy-pasting orders, basically Excel management. She does the same at the end of the day. If her team is struggling to move a shipment for the right price and payment term, she needs to take over and address it. She is the only person who can talk to the finance team to adjust the payment term if that becomes necessary.

ICP-3 - Decision makers

Decision Makers: For SMEs, the decision makers are usually the operations manager (which in most cases are owners/family offices), whereas for Large enterprises it is usually the CTO or Head of Operations. Our target market is SMEs, encompassing family offices, carrier companies (2-10 trucks), 2PL, 3PL, and Brokerage companies. When focusing on onboarding 3PLs, we systematically are part of the value chain of large enterprises and mid-sized enterprises as 3PLs are contracted partners of 4PLs and large conglomerates like Nestle, Decathalon, DHL, ABInbev, etc.

ICP Prioritisation reasoning and framework:

Reason 1: It is imperative to understand that demand and supply fluctuations are very common in logistics (2-4 major shifts a year, with daily price changes). Companies are willing to adopt any solution when they are desperate enough while paying a huge % of their business.
Reason 2: Truck providers hold majority control in the market due to various unionizations of drivers and family offices operated truck companies.
Exploit 1, companies from Poland own over 20% of the trucks moving goods in Europe (1.2m out of 6m) and can very well change the flow of the supply chain of Europe. Like they did during Ukraine war with Russia.
Exploit 2, Thanksgiving to New Year, price/km which is usually between 0.87EUR/km to 1.2EUR/km can go upwards of 5EUR/km.
Exploit 3, post-Brexit there was a 60k deficit of drivers/transporters in the UK, leading to a 3x higher pay to transport goods to the UK causing an increased interest from Spanish drivers not only for the price but for the opportunity of a round trip from France to Spain. This caused shipment prices from France to Spain to drop significantly.

Outcome: While Load providers hold more control in some months/weeks of the year with a low amount of goods to be moved, there is a minimum price that must be paid which is always the price of fuel + minimum driver's fee. Overall, trucks hold more control over the logistics market until there is a massive surge in rail networks.

In essence, transport companies hold more control over technology company adoption. Common ways of working, if there are trucks on 'platform x' there will be customers who want to pay for it.

Prioritization: ICP-2 and ICP-4

3. Market: The logistics and supply chain of Europe is a staggering 1.2 trillion EUR industry of which road transportation constitutes over 400 billion EUR. With over 3.2 million companies that contribute to goods production like steel, ores, vegetables, fruits, plastic pellets, plants, etc. There are 600k logistics companies that focus on the transportation of goods, this includes truck companies and brokerage companies, with 6 million trucks operating in the European Union. The urgent shipment, i.e. FTL deliveries in less than 2-5 days contributes to over 80 billion EUR, while 200 billion EUR of goods are moved through contract shipments. The digital segment of logistics in Europe constitutes over 2 billion EUR which includes SaaS (freight management system, warehouse/transport management system), and marketplaces.

TAM: Total Addressable Market of 1.2 trillion EUR logistics, with 400 billion in road transportation

• Tennders focus on this market by launching tender-based orders and publishing tenders of loads to be transported. This market encompasses FTL, and LTL for international shipments, along with domestic warehouses to distribution centres. This is roughly over 200 billion EUR segment.
• Tennders also serves this market by helping companies post their yearly/biyearly/quarterly tender to Tennders, where our expert brokerage breaks down their large tender into smaller serviceable tenders.

TAM = ACV * # of potential sales avenue

SAM: Serviceable Addressable Market

• Tennders operations/brokerage team focuses primarily on urgent shipments (shipments that fall out of a tender or are not large enough to be tendered) for the international FTL market with over 80 billion EUR market cap.
• Tennders takes on small tenders letting independent/small truck companies compete for shipments. (this sometimes comes from TAM, and sometimes from 3PLs as urgent service)

SAM = ACV * Target segment market of TAM

SOM: Serviceable Obtainable Market

• Tennders brokered logistics operations for over 100 companies in both contracted and urgent capacity generating over 7 million EUR of revenue with a 14% margin, using our SaaS to operate while onboarding over 300 customers and 500 carriers (for free, as partners). In year two, Tennders brokered logistics for over 500 companies generating over 13 million EUR in revenue with a 9% margin with more focus on selling SaaS and financing services.
• Tennders pivoted their SaaS to be launched to our customers and other companies so they can do on their own, what Tennders has been doing for them saving hundreds of thousands of EURs.

SOM = last year share * this year SAM

Tennders SaaS is in the Early Scaling stages

Some of the channels of acquisition being used yet require re-work:

Organic: Our primary revenue source is our logistics operations which offers services to logistics operations of companies of various levels from small truck companies, to large logistics operators. Each of them has their own set of challenges and requirements, which are served by our brokerage team. Although this is a highly intensive operation in both cost and staffing, this brings a strong sense of trust and relationship.
Additionally, SEO optimizations are only responsible for arrival on the website as these are domain-specific B2B trades, users don't look for shipments on Google except for finding the company reviews.

Context: SEO for Logistics B2B is not the ideal place to invest considering the nature of business where the likelihood of a user using a search engine to find trucks or shipments is low to none.

Experiment: To improve the digital presence in search engines to push SaaS growth, Tennders can focus on promoting the domain and creating subdomains that are traceable for search engines' crawlers.
Current: Working with metadata of webpages and using keywords as identifier for SEO. (first 5% is ok)
Stage 1 improvement: Fix and improve sitemap

• • • List down all levels
    • Improve the flow of pages and content relationships
    • Keep it packaged for Google, Bing, duckduckgo, etc (country-specific for target markets)

Stage 2 improvement: Website localization

• • • Website localization with subdomains (since crawlers of search engines will identify each of them independently and prioritization SEM)
    • Localized: Each domain and subdomain by country linked with its intended sitemap

Stage 3 improvement: increase backlinking of domains for each market from trusted and authoritative websites, partners, customers and guests

• • • doFollow links instead of noFollow links to gain authority (improve SEO and ranking)
    • • editorial
      • guest blogging/business profiles
      • customer insights
      • redirection to the main domain before the user's sub-domain (SERP doesn't measure bounce rate)
      • webinars
      • press release
      • testimonials

Paid Event Marketing: Promotional campaigns to introduce Tennders to the market through events like SIL Barcelona, Intralogistica Poland Expo, Clima de Empressa, IntreLogiste, etc.
These paid events introduce the company, its services and its products to the majority of the industry while some act as lobbyists for large corporations. This only opens a dialogue for the sales team, which still requires product and sales to convert.

The event costs for a display/discussion counter is 5k, and the overall budget for marketing per event is 10k-20k.

Experiment: Onboard customers directly on SaaS encouraging our partners/existing customers to talk about the product more. Giving a promotional partnership for 1 season (March to May) as part of the event-based onboarding.

Each event acquires at least 10 new customers contributing over 100k each in revenue, especially live testimonials from existing customers favouring our customer acquisition on traditional logistics

Total event cost = 20k

CAC/customer = 2k

LTV = AOV * % margin * frequency * retention

= 1200 EUR * 10% * 10 order/month * 12

LTV/customer = 14.4k

CAC:LTV = 1:7

Experiment target gain: 10 new customers on SaaS with average 20k EUR as annual fee for product usage.

Total SaaS revenue = 20,000/annum * 10 new customers

= 200,000 EUR

Total transactional business (brokerage) revenue = 14,400 per month * 12 months * 10 new customers

= 1.728 million EUR

Partnerships: Onboarding companies on Tennders SaaS as a service provider for logistics services go hand in hand with traditional brokerage of logistics services. However, this does not have enough engagement until they need something from a broker. The onboarding cost on SaaS is steep.

Selected experiments: Organic and Paid event marketing

Organic experiment: Localization and SEO authority on domestic/country-specific search engines

Cost structure for organic experiment:

• Purchasing sub-domains to allocate organic presence in each country of operations
• • Spain - yes
  • Germany - yes
  • France - yes
  • Portugal - no
  • Poland - yes
  • Netherlands - no
  • Belgium - no
  • UK - no
  • Italy - no
  • Bulgaria - yes
  • Turkey - yes
• Cost per sub-domain ranges between 250 EUR to 5k EUR per annum
• Total budget for SEO = 25k EUR
• Time allocation = 6 months
• Feedback loop = 2 months

Paid event: High CAC:LTV ratio (1:7)

Budget:

• Annual spend of 100k EUR for event-based acquisition targeting 5 events relays over 2 million EUR in annual revenue per event.
• Target to acquire minimum 10 customers per event
• SAM = 80 billion of the transactional market with 2.5 billion of Digital/SaaS market
• • Logistic SMEs with revenue between 20million per annum to 200million per annum
  • 3PL and 4PL enterprises with revenue over 200 million per annum
  • Large enterprises with revenue over 1 billion per annum