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The pandemic threw — and continues to throw — supply chains into a state of chaos. According to a 2021 Statista survey, 50% of shippers said that they were struggling to cut transportation costs, a challenge that’s only going to increase as Russia’s invasion of Ukraine impacts global fuel prices. Other barriers to success in logistics and shipping including fluctuating customer demand, inventory management, finding talent, and keeping up with tech as well as sourcing, manufacturing, analytics, and data management. Last year, Deloitte found that more than 40% of companies saw their costs increase by 5% or more as a result of ongoing supply chain issues.
Goods of all kinds have been affected by the current logistics blockers, including fine arts, jewelry, and antiques. Searching for a tech solution to the woes, entrepreneurs Clément Ouizille and Edouard Gouin four years ago launched Convelio, a company that uses algorithms to offer high-end sellers instant quotes on shipping. Bolstered by the pandemic-tinged state of the market, Convelio recently closed a $35 million investment round, bringing its total capital raised to $45 million, the company announced this morning.
The idea of applying automation to shipping is hardly new. Loadsmart, Flock Freight, and their rivals use AI to match shippers with truck transportation, while companies like Cargo. One algorithmically find air routes for cargo. But Convelio, uniquely, focuses on luxury items, which can be more expensive to ship the traditional way because of the delicateness of the products being packaged.
Ouizille came up with the idea for Convelio with Gouin while working as a logistics lead at Pamono, an antique furniture retailer based in Berlin. Gouin is a serial angel investor, having backed income-pooling startup Pando and no-code payments framework provider Primer, among other companies.
“My cofounder, Clément Ouizille, and I started our careers working for Rocket Internet’s COO Adrian Frenzel, now global COO of Gorillas. During our time working for Rocket’s portfolio companies, we developed an acute understanding of startup operations and went on to build ecommerce companies in the fine art space out of personal interest,” Gouin told VentureBeat via email. “We quickly came to realize that, contrary to more classical ecommerce spaces, fine art was missing a key piece to successfully transition online: efficient, and integrated, shipping.”
Convelio, which delivers to over 80 destinations, considers parameters including fragility, dimensions, and value to create a logistics chain for artwork and other luxury products, like sculptures and furniture. For customers such as Christie’s, Sotheby’s, and 3,000 other auction houses, galleries, and collectors, Convelio automates customs, insurance, real-time tracking, and delivery processes.
Pieces shipped by Paris-based Convelio typically range in value from €5,000 ($5,565) to €1 million ($1.11 million), according to Ouizille.
“We have developed internally an instant pricing algorithm that assesses multiple data points instantaneously across the entire logistics chain,” Gouin explained. “Convelio’s technology not only enables platforms to enhance the customer experience on their website by implementing our API or widget, but it can also be used to automate internal workflows such as shipment collection, invoicing and billing, or inventory management … For a partner, relying on our core technologies … means it can streamline its processes and support both buyers and sellers with post-sale administration.”
In addition to automating quotes and workflows, Convelio helps to manage documents and customize different shipping services. Its network spans 19 “crating centers,” Ouizille says, which are responsible for ensuring goods aren’t damaged during shipping.
The luxury goods market has taken a hit during the pandemic, with the world’s top 100 luxury goods companies generating revenues of $252 billion in 2020 compared with $281 billion in 2019. According to Deloitte, over 80% of the companies in the top 100 reported lower sales in 2020, reflecting pandemic-related store closures, travel bans, shifts in consumer demand, supply chain disruptions, and other factors.
But in what can only be seen as good news for 200-employee Convelio, there’s signs of recovery. A Bain & Company report finds that luxury products in general in 2021 were first to recover to their 2019 levels, driven by the loosening of pandemic restrictions and by lockdown-inspired home upgrades and blended living and working spaces.
Coinciding with the rebound, venture capital (VC) firms are pouring money into the broader shipping logistics space as potential solutions to supply chain efficiency gain prominence. According to Pitchbook, VCs pledged $12.6 billion toward supply chain technology startups in North America and Europe alone in 2020 through more than 500 deals. Grand View Research predicts that the global transportation management systems market will be worth $27.48 billion by 2028.
Convelio claims that it was responsible for 14,000 shipments last year with a cumulative value of $265 million. The company’s annual recurring revenue increased 2.5 times while its workforce grew to 200 people.
Convelio says it plans to explore other market segments where “[its] expertise in shipping bulky, valuable and fragile items” can be leveraged.
“Since launch in 2017, we’ve recorded an average 98% compound annual growth rate in revenue, and in 2021 alone, revenue increased by 2.5 times,” Gouin said. “The vast majority of the revenue in the fine-art shipping market, a $4 billion opportunity, sits with traditional, low-tech incumbents and this is what we are going after as a start. Our competitive edge has always been on building the best experience for our clients by leveraging technology. We have more than a head start, so we are going to continue keeping our heads down, keep working on shipping more, and faster, to deliver the ultimate fine-art shipping experience.”
Forestay and Mundi Ventures co-led Convelio’s latest round, with participation from Acton Capital and Global Founders Capital.
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