June 5, 2023: An interesting way to get your first customer

The return of SalesTO, learn more about the company simplifying B2B transactions, pulling away from the competition with a raise, some cool jobs hand-picked for you

Profile: NetNow

What is NetNow?

NetNow simplifies B2B transactions for small-medium enterprises by providing digital trade credit and payment solutions. Suppliers can manage trade credit applications electronically, eliminating the need for paperwork. Meanwhile, buyers have access to embedded checkout and financing options, allowing them to pay for purchases and extend their net terms seamlessly.

What is the insight/reason that you launched this business?
Through extensive conversations with numerous small to medium businesses across Canada, a common pain point emerged: B2B payments and NET terms were causing significant friction. Many suppliers offering trade credit accounts required buyers to go through a complex process, filling out PDF-based application forms that took ages to process. If buyers didn't hear back in time, they often switched to other suppliers. Our insight was to simplify the trade credit application process, enabling faster onboarding of buyers, resulting in accelerated payments and increased revenue.

How did you get started?
Our co-founder Eli has helped run his parent’s business for years. Trying to get net terms (NET30+) was always a cumbersome and paper-intensive process and often took days if not weeks. He realized that there is an opportunity to leverage open-banking technology and credit data sources to simplify the process and ensure suppliers have a centralized platform to manage all of their credit accounts while making it easier for buyers to apply for Net30 terms.

How did you find your Co-Founders?
We all met at Antler, a startup incubator. We all had experience in the B2B payments space and shared a passion to solve this common pain point in the industry.

How did you get your first customer?
We leveraged our network as much as we could to identify suppliers who offer trade credit to their buyers. We were introduced to a wholesaler whose customers had been demanding they pay on net terms. Applications were processed manually and his AR & Credit team spent ~20 additional hours per week, just to process these credit applications.

We sent over a demo of our centralized platform. From there, we had several conversations on how the product works and how his Credit & AR teams could reduce their time spent on processing trade credit applications by 80%. We closed the deal and the AR team hasn’t looked back since!

What is the long-term vision?
Our long-term vision is to revolutionize B2B transactions across all business sizes, from small and medium-sized enterprises to large corporations. We are initially focusing on the critical starting point of B2B payments: trade credit.

As our platform expands, we aim to integrate payment and financing functionalities, enabling buyers to make digital payments, extend Net Terms, and access short-term financing as needed. Ultimately, we aspire to be the driving force behind seamless and efficient B2B transactions at every level of business.

Any interesting metrics you’d like to share?
While we're still an early-stage start-up, in just three months we've secured our first two customers and seven letters of intent from U.S. and Canadian small businesses. We've also launched our custom SDK and APIs to enable us to integrate into B2B marketplaces with ease.

The pipeline of customers looks healthy and we hope to capture a significant slice of the massive $1.7T B2B commerce market.

Who are your customers and how do you help them?
We work primarily with B2B marketplaces, wholesalers, and distributors, primarily in the construction supply and rental space. We help them streamline their trade credit application process, embed payment portals into their websites, and extend financing to their buyers beyond Net30 (underwritten by NetNow).

If you're a wholesaler, distributor, B2B equipment rental company, or marketplace, and you offer Net Terms, we'd love to chat with you.

What is your biggest victory? What setback(s) did you overcome to get here?
Our biggest victory was securing our first B2B marketplace. After a few conversations, it was amazing to see how aligned we both were on the value proposition. We are solving a real problem and offering buyers something they can't get anywhere else.

A setback we experienced early on was the challenge associated with reaching out to small businesses. These businesses do not have a big presence on social media, which meant we had to get creative to get their attention.

What piece of advice would you like to pass on to other Founders?
Focus on the problem first, before selling the solution. Qualifying the problem and how much of a pain point it is for customers makes all the difference when trying to pitch your solution.

What are the highlights of working at your company?
Given our early stage, we're incredibly nimble and everyone is involved in everything, all the time. This means you get exposure to all aspects of a business, right from the start. We're also very involved in start-up communities in Canada including Antler, Highline Beta, and Intuit.

Anything else to share?
If you know of B2B marketplaces, wholesales, or distributors in industries like construction equipment/rentals, plumbing, electrical, and medical, we'd love to get in touch and learn more about your payments cycle.

Learn more about NetNow and the Intuit Prosperity Accelerator: Toronto here.

Quick Takes: Hostaway pulls away from the competition

What is notable about this round?

It is one of the larger rounds announced this year but it is not clear for how much of the company it is. What is most impressive about this round is how capital efficient the company has been to date.

To date, the company had only raised $3m since it was founded in 2015.

They seem to have scaled quite large despite competing in a crowded space. They have 100,000 properties across 100 countries which resulted in revenue growing 100x since 2021.

How did the company get to this position?

Early on the founders realized that they didn't understand the space as well as their competitors so they decided that they had to better understand their customers before building software but managing a couple of rental properties.

They had trouble raising which forced them to force them to be capital efficient. They have since built a product that enables clients to manage property across multiple listing channels plus tools that enable property managers to do whatever other function they require directly via Hostaway via integration into one of 100 other apps.

Why raise now?

Revenue is growing rapidly due to the surge in travel, vacation rentals, and their product. This capital will enable them to improve the product and roll up the fragmented industry.

What is the takeaway?

Capital efficiency is always underrated by the industry. Every founder thinks the easiest way to build a successful company is to raise a ton of money. While that may true in some cases just as many companies die of indigestion as starvation.

Limited cash can force companies to better allocate resources, make sure they understand customers, and build strong habits to grow rapidly when capital is available. The flip side is that it may take longer to start scaling and may make companies more risk-averse. In this case, Hostaway looks better positioned than many peers who raised venture early on.

This story also is a reminder that the path to success is never a straight line. Covid forced the company to make reductions as revenue plummeted but also set them up to succeed as travel rebounded.

For more on the company check out Marcus' TechTO presentation from 2019.

Check out the full episode for more takeaways, insights, and personal perspectives.

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TechTO Talent

Why is this cool? EventMobi is building on its fourteen years of industry and technology experience to innovate one of the most powerful and engaging event platforms for event organizers, speakers, sponsors and attendees. They’re looking for a UX and Design leader who is as eager to build and refine wireframes/mockups as they are to mentor colleagues and establish design standards.

Why is this cool? KOHO’s purpose is to empower Canadians to build a great financial foundation with products that are radically transparent and easy to manage. They’re looking for a Sr. Financial Analyst, Financial Planning & Analysis (FP&A) to join our team for a role to work remotely based in Canada.

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  • TechTO: Together | TONIGHT June 5, 2023: Learn from the top Founders and creators in Canadian Tech. You’ll get the chance to meet CEO’s like Brett Belchetz of Maple, Rima Al Shikh of BeginAI and MORE!

  • TechTO x OneEleven present: The Summer Social Series | June 26, 2023: A chance to kick off summer with hundreds of founders, technologists, and like-minded individuals (over yummy food and drinks!) More activations and announcements coming soon! LAST DAY TO GRAB YOUR EARLY BIRD TICKETS

  • SalesTO is BACK | July 6, 2023: SalesTO makes it grand return! Stay tuned for more announcements and speaker updates coming soon!

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