Accelerated’s client, a Venture Fund, was conducting due diligence on a significant investment.
A key element of the target company’s growth plans centred on expansion internationally. Our client wasn’t comfortable that it had the depth of international market understanding required to make an informed decision on the viability of the company’s projections, and therefore the risks of the investment.
They needed increased confidence in the company’s international growth projections in order to progress the deal.
Approach:
Accelerated established a team to conduct 15 interviews over three weeks. These interviews spaned potential customers and competitors in the international market.
The interviews gave insights into market trends, including recent COVID-related impacts, margins and key success criteria for market entry.
Synopsis:
By compiling quantitative and qualitative market insights directly from experts Accelerated were able to help the venture fund move from having a critical gap in its knowledge to having the context, market intelligence and insights on key trends to complete their due diligence.
Critical data points used as part of due diligence included:
National providers carry 80% of parcels and don’t need more volume; leading to little incentive to share margin
Regional couriers have made volume and margin gains of 25-30% since Q2 2020, as national couriers did not have the capacity to meet demand
Regional courier pricing is 10-20% lower than national courier pricing; they are perceived to provide lower levels of customer support and customer UX
Regionals have increased driver wages to improve their ability to meet demand and they may be interested in filling geo demand gaps and are investing in facility capacity, automation, and in route optimization software (increasing driver productivity by 17-20%).
Key Buyer Decision Criteria:
Price, on-time delivery, ability to manage the experience when customer is not home
Customer UX such as text the night before delivery to confirm address, video of drop off
Merchants would change carrier for 5-10% cost savings
Sustainability/Carbon neutral may evolve to be a key decision criteria, but it is not important currently
