News about 4 UK growth companies and/or accelerators + turnover in the GRID marketplace, 21st – 27th August 2016:
Kit for Kids £7.4m | Deliveroo | World of Books £30m | Bell Pottinger £41.6m
KIT FOR KIDS: Beancounter who lets toddlers play safely | Laura Onita, The Sunday Times. August 21.
Business: makes cot mattresses, carpets and furniture for toddlers and children. Its products are stocked by retailers including John Lewis, Toys R Us and Mothercare and sold in about 30 countries
Location: Sevenoaks, Kent. Has an office in Dubai and three distribution centres in Britain, America and the Middle East.
Founder: Jan van der Velde
Financials: profits of £89,000 on sales of £7.4m this year. Revenues are expected to hit £14m next year.
1. place in The Sunday Times SME Export Track 100 this year. To keep up with demand, van der Velde bought a factory in Romania in 1995 for only £13 — “a big plant that had gone under” — to expand his manufacturing capacity. A second followed in the Middle East a few years later. Now he counts the United Arab Emirates and America as his biggest markets, and plans to expand into India this year. Building exports, he says, is a way to protect the business against the uncertainty of Britain’s future trading relationship with the EU.
2. Kit for Kids’ cot mattresses are the top-selling product and can cost almost £140. Van der Velde said some of his designs, which have been approved by charity Allergy UK, keep babies’ allergies at bay.
3. His break came when Stoke Mandeville Hospital in Buckinghamshire, placed an order with Kit for Kids. Toys R Us and the London toy fair signed up, helping lift the company’s turnover from just over £100,000 in its first year to £1m by year four.
DELIVEROO: boss battles staff today — and Uber tomorrow | Daniel Dunkley, The Sunday Times
DZ profile: Roofoods Ltd
Business: On-demand food delivery start-up. In the capital it delivers millions of meals. Customers can check how far away their burgers are and track them on a map. It is a substantial threat to Just Eat, its larger takeaway rival, in offering food from restaurants with no takeaway service. Deliveroo charges customers £2.50 an order, and also takes commission from restaurants that sign up to its network. Works with 20,000+ restaurants, including PizzaExpress and Gourmet Burger Kitchen chains.
Location: London’s West End. Offices across the world
Founder: US-born entrepreneur, William Shu, 36 - co-founder and chief executive. Owns a majority stake
Finance: £18.1m loss in 2015 up from from £1.4m in 2014
Investment: Last month private equity firm Bridgepoint (investor in the Pret A Manger chain) led a $275m (£210m) funding round. In total it has raised about $475m and it is believed to have broken into the ranks of tech “unicorns” — private companies worth more than $1bn. Other investors include: ACCEL PARTNERS and INDEX VENTURES.
1. What enabled Shu to turn his idea into a business was the surge in sales of smartphones, which act as both ordering device and navigation tool for the delivery riders. Shu drew up the business plan, childhood friend Greg Orlowski developed the software to build a delivery network using handheld devices. The app took four months to build and launched in 2013.
2. Is at the forefront of the “gig economy” - a new class of business that offers people a way to earn extra money on the side when they choose - which critics say exploits casual workers as they offer none of the benefits of full-time employment. Shu’s couriers are classed as self-employed, so get no pension or sick pay. With its new pay scheme on trial, scrutiny will surely increase.
3. Shu’s big threat (other than dissatisfied couriers) is Uber. The tech giant recently launched its own food delivery service, Uber Eats, in London. The $66bn Silicon Valley giant has billions in investment, and analysts believe it can absorb losses for several years before it turns a profit. Search for Deliveroo online, and Uber Eats is the second result. There could be further headaches for Shu around the corner: Amazon launched a hot-food delivery service in Seattle last year. Even the big fast food outlets have reacted: Burger King now delivers in Britain.
UPDATE: Deliveroo to add 300 UK jobs as takeaway orders soar | Madhumita Murgia, FT. January 18
… its orders increased more than 650 per cent in 2016, despite facing growing competition in the online takeaway sector from the likes of Uber and Amazon.
… now employs more than 1,000 full-time employees in its business globally, and has announced that it will increase its workforce by a third in the coming year. The new recruits will go into areas including software engineering, behavioural economics and algorithm development, in order to create a high-tech team of almost 500 experts at Deliveroo’s new Cannon Street office in the UK capital. … looking for 300+ people to join engineering team.
… the more than 8,000 self-employed cyclists who deliver food in the UK held a series of demonstrations in August against a new payment structure that could result in lower wages. Some of the riders have also demanded union recognition and workers’ rights from the company.
WORLD OF BOOKS: How unwanted second-hand books became big business | Jonathan Margolis, FT. August 22, 2016
DZ profile: World Of Books Limited
Business: sells second-hand books to a global audience It buys 70m volumes a year. It sells 80 per cent of its stock to recyclers, the rest to readers in 175 countries. Last year it rehomed 5m books, making it, so it claims, eBay’s second-largest seller globally, by transaction numbers, of anything. The company says it is also the world’s fourth-biggest independent seller by volume on Amazon.
Location: Goring-by-Sea, on the south coast of England
Founder: Simon Downes, 37, 2 friends + father of one of them - local businessman Arthur Maxfield
Staff: more than 500 people
Financials: turns over £30m and made £1.3m profit in 2015, its fourth profitable year
1. The public got to know about World of Books in 2014, when it released Ziffit, an app with which you can scan the barcode on books (also CDs, DVDs and games) and get an instant offer based on global market prices at that moment. Ziffit sends couriers to pick books up for free — at least, those the app says yes to. The company says it has paid £6.5m to users to date.
2. One of the many clever things about is that it doesn’t need to maintain its own retail site. Its system is integrated with all the major customer-facing platforms — when you buy a second-hand book on Amazon, it will often have come from Goring via the ecommerce behemoth.
3. Competitor: ABEBOOKS, which has been part of the Amazon empire for several years
How to make profit go round in circles | Peter Evans, The Sunday Times. March 31 2019
4. ....ships to more than 190 countries — including Vatican City —is on track to make sales of £78m this year.
5. The business buys unwanted books by the ton from charity shops, uses a cutting-edge scanning system to work out whether they can be resold, then lists them online. It sells a book every 1.5 seconds — mostly through eBay and its own website — and this year will spend £15m on postage. On an average day, the business takes delivery of more than 300,000 books, including an estimated 750 Harry Potters and several crates of the Hunger Games trilogy. However, about 80% of the load is worthless and will be recycled — equivalent to 26,000 tons last year. ....paid charities more than £2m for their unwanted books last year. Most of the books the company buys are sold for a couple of pounds or recycled.
6. ...employs 700 staff at sites in West Sussex and Coventry. Graham Bell, chief financial and operating officer.
BELL POTTINGER: Lord Bell quits as Bell Pottinger chairman | Henry Mance, FT. August 26
Business: public relations group
Founder: Lord Tim Bell, 74, former communications adviser to Margaret Thatcher and Bell Pottinger chairman.
Staff: He will be replaced as chairman by Mark Smith, chief operating officer of Chime.
Financials: In 2014, the last year for which accounts are available, it recorded pre-tax profit of £1.2m, on revenues of £41.6m.
Investment: Bell continues to own about 7 per cent of Bell Pottinger, which became a partnership after a management buyout from Chime Communications in 2012. Chime was sold last year to private equity group Providence and marketing services group WPP for £374m.
News: Bell plans to set up his own advisory firm called Sans Frontières – which was the original name of the public relations firm set up by Lord Bell, which was later renamed Bell Pottinger.