- Tradeshift is a leading digital business network for supply chain payments, marketplaces, and apps.
- Its 2018 round of funding, led by Goldman Sachs, raised US $250 million at a valuation of $1.1 billion, giving the company unicorn status.
- In January, Tradshift announced a Series F funding round of $240 million from a combination of existing and new investors, bringing the total raised to $661 million.
How was Tradeshift founded?
Mikkel Hippe Brun. Tradeshift was founded in 2010 by myself, Christian Lanng and Gert Sylvest. We first met on a project for the Danish government to create an electronic invoicing system which would allow businesses to exchange invoices digitally with government departments. Our experience working with the government gave us the inspiration for Tradeshift. We wanted to connect all the companies in the world onto one common digital platform that would make it quick and straightforward to trade with each other.
We left government and, like many early-stage start-ups, found ourselves in a makeshift office in a garage in Copenhagen, full of ideas and with just about enough money behind us to keep the lights on. We went to market approaching large multinationals and government institutions that had the buying power to really make a change in the supply chains.
Today, Tradeshift is the world’s largest business commerce network. Our platform connects over 1.5 million companies, across 190 countries. 150 of our customers belong to the so-called Fortune 500. Around $500 billion in business to business transactions crosses our platform every year. And that number is rising rapidly.
What makes Tradeshift different from other business platforms?
The global nature of modern supply chains means that relationships between businesses have evolved from one-to-one, linear engagements, into complex ecosystems of interconnectivity between buyers and suppliers spanning the globe. The business software designed to facilitate this connective tissue is simply not up to the task. Every 1:1 connection was a project in itself, requiring significant time and effort from both the buyer and the seller. It’s a costly, cumbersome and inefficient process, and the results are disappointing.
What we set out to achieve with Tradeshift took inspiration from social networking technologies like LinkedIn. The social networks we use in our personal lives help us form connections and share information pretty much effortlessly. We do the same for businesses. Once they’re connected, then you can then digitise virtually any aspect of the relationship from invoicing, through to purchasing, risk assessment of suppliers.
What we are good at is creating a starting point for businesses to become ‘digital by default’. We’ve opened up the APIs on our platform to allow specialist third parties to offer their services to customers our own Tradeshift App Store. We have more than 200 different apps covering everything from ERP and accounting, through to modern slavery and sustainability tracking.
What challenges have you faced as a company?
In our earliest days, working out of a garage in Denmark, one of our biggest challenges was the weather. We regularly found ourselves having to make the decision as to whether we wanted to turn the heating on or use the coffee machine. Of course, a regular supply of caffeine won pretty much every time.
More recently, one of my biggest learning experiences came when we decided to expand our operation into China. This is arguably the toughest market in the world to break into – just ask Google or Facebook, and no amount of advice will prepare you for it. One of the most important lessons I learned was that there is no such thing as a ‘win-win’ in China. Everything is about leverage and having the upper hand. Even now, more than five years into the project, I’m still learning.
What are your plans for growth this year?
2019 was one of our most successful years to date. We grew our revenues by 60% year on year and closed more than 300 enterprise deals. We recently announced a $240m fundraise, which will give us the runway we need to accelerate towards profitability in the near future. 2020 is about making good on the strategy we have devised to deliver on this objective.
We’re seeing phenomenal growth across our core products including Tradeshift Pay and Tradeshift Go, so we’ve made sure we’re equipped to double down in those areas where we’re seeing the greatest momentum. We’re also putting a real focus on supercharging our network finance program, providing much needed liquidity to companies in 100+ countries. Ten years on from that first day in the garage, we’re in a great position to what we first set out to achieve.