Speys, a 2016 founded Finnish growth company with offices in Finland, Estonia and the Netherlands, builds digital logistics solutions enabling customers to outsource their logistics operations with virtual teams and automated tools. The company has now raised 1 million euros. The funding round was lead by Innovestor and joined by a large finnish institutional investor as well as private investors.
Freight logistics is perhaps the most underdeveloped of all major industry domains with logistics truly being a massive industry: its global size is estimated at 8,5 trillion euros (that’s 8,5 followed by seventeen zeros). The digital segment of logistics services amounts to app. 900 billion euros and the industry is growing 20-30 percent annually.
In people logistics we have seen significant digitalization-infused innovations in recent years. Cargo, however, is stuck still using age-old methods. Now Speys is working towards disrupting the freight logistics market.
Renewing freight logistics
In 2015 Jouko Sipilä, CEO of Speys, together with his partners conducted market research on digitalization and trends.
“We realized that there are several opportunities to modernize freight logistics practices”, Sipilä recollects, and continues: “We were an unusual startup in the sense that we did not collect any angel funding when we started. We started immediately to run our business with cash flow and began to grow nicely. In March 2016 we founded the company and by the end of the year our team had already five employees.”
During the past two years Speys has developed a virtual control system built on Amazon’s cloud which enables global scalability for the company. Customers submit their orders via the system, which delivery partners also have direct access to.
“We offer the technology and needed service to transmit the orders. We are not just a marketplace in the cloud, but instead we take the end-to-end responsibility in managing our customers’ logistics”, Sipilä explains.
International expansion and forecasts
With the now raised funding, the company plans on executing their international expansion to the Netherlands and Eastern Europe, opening an office in Hungary and focusing on sales, marketing, and growing their product team.
“Speys is a disruptor in the B-2-B transport sector, which is still fraught with legacy systems and inefficient processes. We see significant value in efforts to increase freight connection from factory to warehouse and to the final destination. Speys’ digital service platform improves operational efficiency, saves transportation costs and reduces environmental impact in the supply chain,” says Wilhelm Lindholm, Chief Investment Officer at Innovestor.
A key longterm objective for Speys is to increase the level of automation in operations. The company has set itself the ambitious target of operating with a 90 per cent automation level in the year 2025.
To conclude, Sipilä names three central learnings from the company’s journey so far:
“First of all, a monolith system does not work in running a global business. Instead, the solution should be cloud-based. Secondly, the working culture is always a risk in logistics business and one should be prepared for it. Changing attitudes and getting customers on board takes time, persuasion, and good references. A third central learning is that you should develop the project together with customers. This is what we have done and it has helped to get us a working product with a good user experience.”
Speys joins our portfolio, which is one of the largest private venture backed portfolios in the Nordics, through our investment from our Innovestor II IP fund.
Innovestor is an early-stage venture capital investor also offering direct co-investment syndication opportunities and building growth programs.
Written by Santtu Toivonen