Fact: iStore iSend began its fundraising process right at the beginning of the COVID-19 pandemic. This is how they managed to do it
In July this year, logistics and supply chain company iStore iSend announced a “seven-figure US dollars” funding round from Kuroneko Innovation Fund, a Japanese corporate VC firm owned by Yamato Holdings and managed by Global Brain Corporation.
This funding round was an extension of its US$5.5 million Series B funding announced earlier this year, which was co-led by Gobi Partners and logistics company EasyParcel.
Funding announcements are always a great reason to celebrate. But in times of pandemic, where travels in many Southeast Asian countries remain restricted, it has become an even bigger achievement. For the curious minds, this might lead to the million-dollar question: How does one manage to meet and build relationships with potential investors when events are cancelled and face-to-face meetings are limited?
In an exclusive interview with e27, Joe Khoo, Co-Founder and CEO of iStore iSend, reveals how the company builds the relationships that eventually lead to the investment. There are certainly challenges that the pandemic has brought, but the founders are able to utilise tools to help them overcome it.
It is a lesson in perseverance and faith that all startup founders can benefit from.
The decision to reach out
Before we can get to the “secret sauce” behind the company’s successful relationship building with investors, we need to understand the history behind iStore iSend. Interestingly, before making headlines with their funding announcements, the Malaysia-based company operated for a decade as a self-funded company.
According to Khoo, while the market today has an understanding of the importance of logistics in supporting the e-commerce industry, the situation was different when iStore iSend began their journey.
“We’ve been kind of under-the-radar … we’re not like the typical startup that a lot of people talked about,” he says.
Their fundraising journey was even harder as it happened right at the beginning of the pandemic when opportunities to network became harder to find, if not impossible. This was a major challenge as they were supposed to expand their network as a foundation for their fundraising effort.
“You are building a relationship with a potential partner that you will be doing business with for a long time,” Khoo says. “So, think of [fundraising] as a relationship-building exercise first, before you can move on to pitching. I liken it to making a friend: your first meeting may not be the best, but after that, you keep on talking, sharing, and finding commonalities.”
To tackle the challenge of making a new connection from the safety of home, Khoo used tools such as the Connect feature, available exclusively for e27 Pro members. The feature enabled startups to make connections with investors in the platform, as an entry point to further collaboration.
“As a company that was fundraising for the first time, we didn’t really know anyone, and we couldn’t attend any events because of COVID-19. So we relied on the leads that we got from e27 Pro Connect. From there, we started talking to people, expanded our network, and got introduced to other people,” Khoo says.
“Global Brain was one of the leads that we got through Connect. From there, it blossomed into a relationship that we now have,” he continues.
He further explains how the tool enabled him to get introduced to people he would not otherwise know. The process itself was not always instantaneous; Khoo says that it took months until iStore iSend finally received a callback. The earlier months were all about getting themselves known and connecting to as many investors as possible.
In fact, after they had their initial contact with Global Brain Corporation in early 2020, Khoo honestly thought the deal was never going to happen. It was not until June that iStore iSend could finally move the conversation forward.
“If it was not for Connect, I would not be able to … know where to start getting contacts for the investment. It was really crucial in helping me start the process,” Khoo stresses.
“What Connect has done is create a platform for companies to connect with potential investors, and I think it has worked really well for us. After that, the constant communication via Zoom or WhatsApp continued, and that was how we maintain the relationship.”
The secret sauce to successful fundraising
Khoo says that the fundraising process is something that is often romanticised in the tech startup community, especially with Hollywood displaying popular images of founders and investors meeting in a fancy restaurant –then having the deals written on a piece of napkin.
But the truth is that fundraising is “real, serious” work.
“I spent the whole of 2020 learning the ropes of fundraising from scratch and that was really hard work. You need to have a lot of preparation,” Khoo stresses.
This preparation mostly involves the kind of questions that potential investors might ask founders which can include plenty of numbers.
“For a good three to six months, I was just [focussing on] learning. How to approach investors, how to give them the best version of our company’s story. Along the way, you learn which information is not that important,” Khoo continues.
“And trying to convey that message in a concise and clear way is not easy. It’s difficult; it’s definitely a skill … you can definitely learn that, but it takes time.”
This is why, during this period, it is good to have partners that founders can practice with. That way, the partner can help founders by playing devil’s advocate and asking difficult questions.
What is next for iStore iSend?
Now that the funding is secured and the company has built a network that can help it move forward with confidence, iStore iSend has plenty of plans to execute. Their main focus is to expand their business regionally, particularly to Vietnam and the Philippines.
“We are also in the middle of hiring talents,” Khoo closes.