Shipping Aggregator Temando Hits Profitability And US Funds Are Taking Notice

Shipping aggregator Temando has set its sights on small to medium customers and overseas markets after having signed on about 80 of Australia’s 100 largest retailers and reaching profitability this year.

Temando has raised a total of $6 million in two funding rounds since its founding in 2009 and lays claim to a growth rate of 500% in the last three years and more than 300% in the past year.

The software company doesn’t disclose financial figures, but founder and CEO Carl Hartmann said Temando reached profitability “about a year ago” and was now getting “a lot of attention” from US funds.

Temando pulls together data from shipping companies and international authorities to help online retailers automatically price and optimise shipping options.

Hartmann says the company now counts most of Australia’s largest retailers – including Myer, ASOS and Deals Direct – as customers thanks to partnerships with technology brands like IBM.

While the biggest 0.17% of internet retailers accounts for about 61% of the sector’s revenues, according to market data, Hartmann says Temando still has a significant long tail of small and medium retailers to address.

“We are mature in Australia but there are new retailers all the time and its a never-ending growth cycle for us as more and more [retailers] go online,” he said.

“Naturally, we’re focusing increasingly globally. We’ve got opportunities in the pipeline in America where there are more transactions than the entire Australian market with one retailer.

“We’ve got ones in China that are like that too; some [retailers] in China that we are talking to have more transactions than Australia Post does as a business. It’s mind-boggling once you start thinking of the global opportunities for someone like us.”

Temando is headquartered in Sydney. It recently opened an office in London and is looking to establish a presence in Silicon Valley in the coming year.

“Obviously we are lucky enough to have good investors but we are reaching that size where our market position is getting a lot of attention from US funds,” Hartmann said.

“E-commerce is very hot right now in Silicon Valley … You can never have enough people or capital; let’s just say that we’re getting approached a lot and it’s in the back of our minds.”

Of its capital raised to date, Temando has about $5 million from the Ellerston Capital – formerly the Packer family’s fund.

Its board members include Ellerston representative Anthony Klok, who was formerly Crown’s investor relations and business development head, and former Crown and Woolworths CFO Geoff Kleemann, who also sits on the board of listed infrastructure firm Asciano.

In the long run, Hartman is considering a stock exchange float or buy-out for Temando – although he has strict requirements for a buyer if the latter.

“From a long-term perspective, we’re either going to get big enough to list by ourselves or interesting enough, strategically, that we’d be an acquisition target for a lot of businesses,” he said.

“[I have] no preference at this stage … If listing makes sense, it makes sense, but every man’s got his price. If the right offer came up and there was a cultural fit as well, certainly we’d consider it.

“The only rules we have is no transport companies and no retailers because we have to be agnostic. Obviously there are people that we’re a natural fit for. But at this stage, we’re just having a lot of fun, really enjoying what we’re doing.”

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