Almost exactly a year on from its launch, Auckland-based tech startup Vend has secured a million-dollar chunk of capital that will enable it to expand its international presence and tap into the hot mobile payment market.
Vend, a web-based POS and inventory software, has been notably funded by Wellington investors Sam Morgan and Rowan Simpson – but its latest capital injection comes from German-based consortium Point Nine Capital.
“Just like Zendesk has revolutionised the customer service industry, Vend wants to bring a revolution to the POS industry and improve the lives of hundreds of thousands of people working in retail,” says Point Nine Capital managing partner Christoph Janz.
Vend chief executive and founder Vaughan Rowsell says the company had international ambitions from the outset but hadn't been able to capitalise on all the opportunities that came its way.
"This is really going to let us scale up the business. We've only really just launched – in 12 months we've gone from having a couple of test clients to now thousands of users and growing daily."
Vend launched as a one-man operation, but "astronomical" growth means it now processes more than $10 million in sales each month.
The cash – Rowsell says it amounts to about $1 million – will let Vend build up its product and sales teams. But most significantly, it's about to open a sales and support office at the Kiwi Landing Pad workspace in South of Market, San Francisco’s tech hub – home to Twitter, Zynga and many more.
Software firms Xero and Jade were the first to sign up for the space and Rowsell says he'll likely commute to the US every month. He's currently recruiting local candidates for the office; the US market is a key one and Rowsell says finding people who understand the intricacies of US retail is essential.
Given recent development in the mobile payment space, the timing couldn't be better. When Idealoglast talked to Rowsell, he made some spot-on predictions about the retail and mobile payment market.
Rowsell expects to find himself working alongside companies with much deeper pockets than the Trade Me millionaires, like Amazon, PayPal, Google and Visa. “But with the innovations surrounding mobile payment, we’ll wait and see who the winner is,” he says. “One of the more exciting ones—and there’s been no signalling of it coming out—would be Apple’s move into this space. The iTunes store is probably the world’s biggest market place where people have a virtual wallet.
“Google’s been in this space and they’ll be chipping away at something. But it’ll be an arms race between Apple and Facebook. Facebook has the world’s biggest database of users but they’re not currently transacting, whereas Apple has the world’s largest database of users that they do financial transactions with, excluding Visa.”
Indeed, Visa, AmEx, PayPal and many
US mobile carriers are now pushing their own digital payment
technologies, although to date we've seen nothing from Apple or
Facebook, with Google Wallet stepping up to the plate first.
If they have their way, we'll all soon be paying for groceries, petrol and movies with our cell phones. Rowsell envisions an entirely virtual system where physical loyalty cards no longer clog up our wallets.
"For so long retailers have been punished by their software and had zero innovation," he says. "But once you've got your platform running in the cloud, the possibilities are endless."
Next comes integration with mobile payment and universal customer loyalty programmes, he says – "building on extra innovation".
"And now we have the building blocks to make it all happen really quickly."
Vend's customers range from high street fashion chains to franchises and "mom and pop" retailers. Rowsell says setting up a traditional POS system can cost tens of thousands and take weeks to complete. Meanwhile, Vend's platform integrates with a host of web-based e-commerce and accounting solutions – the more choices it can offer customers, the better, he says.
And a decision made early on has paid off, making Vend the world’s first HTML5 retail POS, according to Rowsell.
"We've got retailers using anything from Windows to iPads to Android to even Linux. When we were building it HTML5 was not used anywhere, so we took a bit of a gamble. We thought HTML5 would be the platform of choice in the future," he says.
"From the practical point of view, to retailers it means if they want to adopt Vend they don’t have to throw everything out and start again. They can just use Vend on their existing equipment, bump their old crusty POS software and be up and running."
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).