Spotting an opportunity in his French university dorm, Mathieu Cornillon started providing alcohol delivery to his fellow classmates.
“It comes from a very old experience I had in France, I created a company called SOS Aperol which delivered booze to students after hours,” he said.
“We realise that the internet can give you everything you need from information, content and design but when it comes to physical things it’s broken.”
It was this relatively crude little side business which gave him the confidence to launch Sherpa, an on-demand delivery service, in Australia.
The startup which delivers almost anything, from anywhere, within two hours in a 20 kilometre radius of metropolitan centres around the country. It has been quietly running for most of this year, building out a delivery network in Sydney, Melbourne, Brisbane, Adelaide and Perth. It expects to hit a 2000 delivery run-rate by the end of July.
Cornillon has brought on former Alphatise exec Ben Nowlan and Bastien Vetault as co-founders and together they have raised $500,000 in seed funding round at a valuation understood to be around $2 million.
“We’re on that startup journey again, getting investment and trying to grow,” Nowlan said. “There’s plenty of businesses globally which are taking crowdsourcing of delivery drivers but are focusing on niches.
“We don’t need to niche it into a particular vertical.”
While the startup delivers usual items like flowers and food, Nowlan said some of the more interesting items picked up and delivered to date include Viagra, condoms, nappies, and a kid’s pair of footy boots after the budding sports start left his at home.
The team has high hopes. According to an investor document sighted by Business Insider, it has mapped out a plan to reach an enterprise value of $1 billion in five years.
The plan is to exceed $2 million in revenue in year one, climbing to more than $20 million in year two. The current business model allocates 25% of each delivery to the company while the Sherpa driver keeps 75%. The average delivery cost is about $20 but it’s based on location to location.
That’s what the team is taking to investors as it gears up to raise a $2.5 million round, targeting investors in Asia. Pitching to Chinese investors is a strategic move as the company looks to springboard into the market.
“Strategically, our growth trajectory is aimed at Asia,” Nowlan said, adding raising capital there will make it easier for the company to launch in the market.
Crowdsourcing drivers to do deliveries is one way the digital economy is providing extra, flexible employment options. It’s similar to the Uber or Airbnb model where a platform connects someone with a need with a person willing to provide a service for a bit of extra income.
“The whole idea is to get the community involved,” Nowlan said, adding, “We use unused capacity in the market so people who have extra time or who want extra cash.”
It’s an issue governments around the world are struggling to deal with. Over the weekend Hillary Clinton promised to “crack down” on employers who “misclassify workers as independent contractors”. Today, Joe Hockey said the Australian government is trying to figure out how companies like this fit in the tax system.
“I strongly believe that Australia needs to be a leader in the sharing economy,” Nowlan said. “If it’s got the right regulation and structure around it, then it enhances communities and governments economically.”
Nowlan says many delivery drivers are underemployed people, university students, single mums and retirees.
“Those guys are earning income which takes pressure off the government,” he said.