I haven’t stepped foot in a retail store in over a year and a half, and the numbers suggest I’m not alone. As we’ve all seen, the COVID-19 pandemic accelerated US e-commerce growth by a full three years, generating $860B in e-commerce revenue in 2020 (a 44% increase YoY).
But with this growth has come significant growing pains across our supply chain. My son’s winter clothes? After 6 weeks “in transit” I finally had the company resend them. In April — 6 months later — the original order arrived. That present for mom? Lost in the ether between a warehouse in Tennessee and a sort facility in Bladensburg, MD. With other packages, I’m contending with damaged goods, missing items, porch piracy, and more. For brands, the $110B parcel delivery industry is utterly failing them. Some brands have been fired as customers of FedEx and UPS, others are struggling with major delays, rising costs and surcharges, sky high exception rates, and ever more disappointed customers who simply can’t rely on things showing up on time.
Amazon’s approach has long been the gold standard here. Through deep investments in in-house technology and the build out of their own delivery networks, Amazon has been able to provide the reliability, visibility, and accountability consumers now expect. What about everyone else?
Enter, Veho. Veho is a new, technology driven logistics network, reinventing package delivery for the e-commerce age. Veho’s magic is the ability to provide brands with the three nines reliability they’re accustomed to in enterprise SaaS, but have only dreamed about for their logistics.
Veho upends the entire narrative around shipping. Given their superior reliability and customer service, they have transformed shipping from a cost center line item to a customer delight opportunity and a brand differentiator. For Veho, the shipping experience is an extension of a brand, so it better be great. Retailers love it as a way to own the brand experience end to end, and when deliveries are made on Veho versus other logistics networks, they have meaningfully higher repeat usage. Veho has captured the affection of not only retailer logistic buyers, but also of the company CEOs, CFOs, and CROs who want to demonstrate their customer obsession and drive revenue lift and loyalty. To date, brands who use Veho see a 19.2% increase in consumer LTV while managing to save over 21% in shipping costs. Brands report nearly perfect delivery scores (99.5+%) and customer satisfaction (4.95+ out of 5) after switching to Veho, and are continuously asking for geographic expansion so they can leverage Veho in more places, for more of their deliveries. Given these impressive numbers it’s no surprise they have zero churn.
Veho’s technology makes it all possible, starting with the deep data integration they have with brands. Further, the Veho platform provides superior and continuously optimized delivery routing, variable route pricing, and end-to-end, real time package tracking and live customer communication through the Veho app.
Using the gig economy and the tenets that have made companies like Uber and Doordash so successful, Veho is building a real time marketplace for drivers and routes which provides the flexibility and reliability both brands and drivers need. Drivers love it, resulting in low churn and a major leg up in a supply constrained talent market. Drivers prefer Veho to other gig work because they can choose their routes and know their earnings the day before. Routes are better planned and can avoid peak traffic and congestion times, and detailed customer instructions and real time communication make drop-offs straightforward, efficient, and less error prone.
We first met CEO Itamar Zur while he was still a student at Harvard Business School. Veho won the HBS New Venture Competition (where Dayna was a judge) with the concept of a robust technology platform driving the next generation of parcel delivery. When we reconnected with him and his co-founder Fred Cook early this year, it was clear they had built exactly that. We were floored by growth numbers we hadn’t seen since the early Uber days (think 30x+ in the last year), and equally impressed by the talented team he had put together (including stand out performers from the hyper-growth days at Uber, Jet.com, Lyft and more).
We are thrilled to finally share our investment in Veho more publicly. As supply chains continue to be re-engineered for the future, we believe brands and customers deserve (and will demand) the visibility, reliability, and accountability they receive in enterprise software and consumer tech. We’re excited to see Veho continue to provide best in class, technology-powered delivery to more and more brands and the customers that love them.