Until somebody comes up with a workable IP-based, Star Trek transporter to
deliver the goods for e-tailers, the demand for moving boxes from one bricks
and mortar location to another will continue to expand.
“Billions and billions of dollars,” is the Sagan-esque market size according to
Jennifer Fonstad, a director at Redwood City, Calif. venture capitalist Draper
Fisher Jurvetson. Fonstad also serves on the board of Web shipping facilitator
iShip, a Bellvue, Wash. start-up which has raised $10.8 million in two rounds of
funding since October 1998 from Fonstad’s company as well as from UPS, eBay Inc., Intel Corp. and Mail Boxes Etc.
iShip is a Web-based, multi-carrier system that allows users to get the best rate, generate a certified shipping
label off their PC’s printer, notify the carrier for pickup and track all the
packages by their own names rather than a having to organize a ton of shipping
numbers. In exchange for all this, iShip believes that its customers will pay a
nominal fee of something less than a buck a package in addition to the tariff
paid directly to the shipping company. So far, UPS, FedEx, Airborne and the U.S. Postal Service are participating.
IShip points out that more than 6 billion packages are shipped in the United States
every year and that number is climbing along with the growth in e-commerce.
“I’m very excited about iShip,” said industry analyst Jerry Michalski of
Societe and formerly of Esther Dyson’s REL1.0. “They’ve got a multi-vendor
solution and are the only people doing this who actually come from the shipping
business.”
Founded by three techies and a suit, Fonstad agreed that experience in the
shipping field was a key factor in her firm’s decision to invest in iShip over
other competitors. The techies — President/CEO Stephen Teglovic, Engineering
Vice President William Smith and Operations Vice President John Dietz — were fresh off a contract
designing an online system for UPS. MBA Suit John Jamerson gave the techies a
credible CFO that investors could relate to.
Key fund raisers Steve and John say their success in obtaining funding for
iShip came after they learned to avoid trying too hard to direct the
conversation during meetings with VCs. In addition, they say their standard VC
pitch got more effective as it shrank in time from 20 minutes, to eight, to two
and finally the most successful when they walked into the conference room with
no presentation at all.
Choosing funding partners is vital as well. The eBay relationship just might be the key factor that gives the new firm escape velocity. Later this year, iShip will be promoted by eBay as their recommended shipping service for the millions of people flogging all those Beenie Babies and Ty Series 3 Trading Cards.
In addition to eBay’s hard cash investment, this sort of visibility could easily be worth millions to iShip in marketing visibility which, in turn, might reduce the amount they may need to raise in subsequent financing rounds.
ALL NEW! internet.com’s HotWatch a monthly e-mail subscription for $99,
featuring Internet Stock Report’s Steve Harmon, and his top 10 noteworthy
Internet stocks for the month. Each month you will receive in-depth
analysis on the top 10 Internet stocks to watch with the information you need to assess
the fast-paced nature of Internet stocks. Staying on top of market changes in the
Internet Stock market is what counts. For $99 per year, you receive 12 timely
issues sent to you by e-mail. Don’t wait, our next issue will be out before
you know it with a whole new perspective on the market.
Sign up today at: e-newsletters