Sheds start-up Stowga’s global push

When it comes to building a tech start-up with longevity, evolution can often play just as crucial a role as innovation. It is one thing to create a system that solves a problem. It is another to ensure that system moves with the times, stays relevant and is always one step ahead of the competition. This is something Charlie Pool, founder of online logistics and warehouse space marketplace Stowga, knows all too well as he gears up to reposition the business to respond to a subtle shift in customer demand. “It’s about making the most of having an early mover advantage,” he says. “We decided that now was the time to really define our USP to work out what differentiates us from the rest of the market and stay ahead of the pack.” Pool’s strategy is a smart one. It is also a brave one. Founded in 2016, Stowga  – which was quickly dubbed Airbnb for the industrial sector – has grown rapidly in the past two years and was given a substantial boost at the end of 2017 when CBRE acquired a stake in the firm. It would have been easy to leave things as they are. To continue to grow with the backing of major investors, including CBRE, is the stuff of dreams for many a young start-up. But with reams of data available to glean from the platform, Pool decided that a quiet summer to take stock was what the company needed to capitalise on its current success. “We took a hit over the summer by not concentrating so much on sales and revenue but rather focussing on changing and adapting the platform,” says Pool. “But I am so glad we did. It is already paying dividends and now every time I look down at my phone, there is a constant feed of people signing up as buyers all over the world.” Pool says repositioning the company has opened the door to a major overseas expansion, adding the changes he has made to the Stowga platform mean it is the only one in the world that offers instant pricing on warehouse space thanks to invaluable data off the back of two-and-half years of trackable transactions. Stowga was set up by Pool, a 2017 EG Rising Star, to address the issue around cumbersome warehouse lease lengths, connecting warehouse occupiers, owners and third-party logistics companies that have short-term surplus space with retail businesses looking for on-demand logistics services. When CBRE invested in the start-up’s £1.5m fundraising at the end of last year, it also signed up to transact all of its short-term industrial contracts though Stowga, although the platform has remained open to other agents despite the strategic tie-up. Almost a year on and Pool is convinced that Stowga’s future is now no longer as the “Airbnb” of the logistics sector but as the “Booking.com”. “What we have done, in essence, is shift from being a B2B for the warehouses to a booking platform similar to the underlying technology used to book hotel rooms or seats on aircraft,” he says. “The latter is a good example. You go to book a seat on a Lufthansa flight or a British Airways flight and you book that seat through a system called Sabre. You might not know that because it’s all part of the wider booking in association with a particular airline. “The very subtle difference is that if something goes wrong with that flight, you don’t call Sabre. You call the airline. It is now very similar with us. We are a booking platform but all follow-up is directly peer-to-peer between buyer and seller. “We used to find ourselves in situations where someone’s invoice was for 500 pallets but they thought it should be for 499 and they would ring us to get that sorted. I realised this would be totally unscalable.” This subtle shift, says Pool, has freed him and his team up to scale the business. Noticing that over the past few months more and more people were signing up for the platform all over the world, Pool has decided that now is the time to expand to meet demand. And he is preparing to do what is required to ensure Stowga keeps its crown as market leader – starting with a massive fund raise. “It is becoming increasingly clear that this market will be one where one clear, dominant leader takes it all,” says Pool. “We have come this far and we don’t want to lose out now based on financing because you can bet your bottom dollar some guy in the US will back an idea just like this. It is becoming increasingly clear that this market will be one where one clear, dominant leader takes it all “We have to be strategic about getting investors in the markets we want to move into. We have global ambition and we really need that because logistics is, by definition, global,” says Pool. “Products come from all around the world and we can see from our data that around 50% of our clients aren’t UK companies so we have to go global. And going global is expensive. “It is a huge, huge market and it will be worth the investment but we need to find backers with the right sort of level of ambition. That’s why we are focussing on the US at the moment for investment in the next round.” Pool adds that this dovetails in with demand as Stowga starts to look beyond the big European logistics markets. “On top of Germany, the Netherlands, France and Spain, the US is a big market,” he says. “And we are looking at China, too. We have been running Google ads in key areas, keeping it quite low-cost for now, just to scope out demand and experimenting a bit. Since doing that about a month ago we have had 70 warehouses in the US sign up to the platform. We also have spaces signed up in India, Indonesia, Hong Kong, Australia, Argentina and Brazil. So it seems the demand is there.” He adds that the US will remain a key focus for the first stage of the global expansion but he hopes this will be the first overseas foray of many. Pool also touches on the instant pricing function, something he believes sets the platform apart from its competitors with or without a global expansion. He says: “The huge amount of data we now have means we can offer instant pricing, whereas our competitors just have an indicative price model. We are now in a position to be able to predict prices. “So we have built a pricing model where a warehouse can set some parameters so that when someone goes on to the platform and searches for space for a thousand pallets, it will instantly throw up prices for all the warehouses we have with that availability. If you were to change it to 100 pallets or shift the timings, the pricing updates in real time. “This is an exciting development because it is a USP, but the most important thing is that it gives us the leverage to scale. And as we look to launch in new countries, scalability has never been more important.” To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette Picture: Will Bremridge