When we first profiled local startup Basin Commerce in the /byte column this time last year, they were very fresh: pre-launch, pre-revenue, and simply pre-validation.
Because the only judgement which matters for Minnesota’s tech entrepreneurs is that which they receive from their respective customers within a target market, /byte is the perfect spot for early stage startups like Basin Commerce was at the time.
This gives the entrepreneurs some helpful exposure, provides our audience with a taste of what’s coming up and allows us to take a wait and see editorial approach towards outcomes. While the majority of those startup profiled under /byte do not proceed to achieve their startup goals (typically because founders quit too soon), Basin Commerce is a timely example of the just opposite: traction achieved in the form of revenue from paying customers.
Specifically, $3.5m worth of commodities have gone through Basin Commerce to date from freight operators in the world of trucking, terminal services, barges, and even storage. For their part, Basin receives a percentage tied to the value of said commodities pushed through their platform.
“It’s been a great launch year for us,” says cofounder and CEO Tom Venable, who along with his partner Pete Olson, come from corporate backgrounds at Digital River (now owned by Siris Capital Group). “We’re satisfied with what we’ve accomplished so far and we plan to grow 10X this year,” he states, noting the efforts of father-son sales combo Scott and Tyler Stefan.
“Three quarters of which is already on the books in Q1…and our new target is $100m of gross freight value by 2020.”
He believes the total addressable market to be over $40 billion in size and knows that they are just scratching the surface of what’s possible in grand scheme of things. Consider just $100m slice of that pie would earn Basin ~$10m/year in revenue under current model.
“This market is still running on spreadsheets and post-it notes if you can believe that,” he exclaims. “And these are some big B2B transactions, as you would imagine, it’s starting $25k+ per barge just to move some commodity from point A to B.”
Venable is quick to point out that Basin is not a broker, per se, rather they are more of a re-seller, whereby they are actually buying the freight service and re-selling it at a markup – more analogous to the 3PL financial models out there.
In addition to Basin’s current platform, they are planning to develop and launch a second software product line known as a transportation management system (TMS) which will tie in with their flagship product and extend the lifetime value of a customer beyond just the transnational layer of now.
The venture has raised just over $100k in angel financing so far, though Venable says that will soon change; Basin counts eight full time employees, four contractors and is headquartered in Excelsior, Minnesota.
Zooming out, Basin Commerce but one of a handful of tech companies operating in the logistics, shipping and transportation space here in Minnesota, while the next IoT Fuse meetup will be squarely focused on such topics.