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Birmingham Post
Birmingham Post
Technology
Andrew Arthur

‘An Amazon built in the West Country’ - the Bristol firm set to become the city's latest tech ‘unicorn’

Fast-growing e-commerce firm Huboo’s head office in Bristol seems like a fun place to work.

Its premises on Corn Street in the Old City includes a climbing wall, pool table, bar, events space that hosted the Bristol tech festival, and a mini studio for the in-house radio station.

Co-founder Martin Bysh jokes his colleague Paul Dodd had wanted a slide to be installed between the floors of the building, which has a view of the gothic skyline from the rooftop balcony.

The building next door, Gilbert House, was also recently leased to the company, enabling it to expand its HQ - with plans for the bottom floor to be rented out as a cocktail bar.

Perhaps this could be expected for a business recently named among the best places to work in Europe and previously hired its own corporate bard to tell stories of the company and its staff’s achievements in song?

Looking around, it’s hard to believe that Huboo, whose technology enables online retailers to quickly access and complete end-to-end fulfilment operations, was launched less than five years ago from two secure storage rooms at a Safestore in Bath.

Given the incredible rise of the company, not least a 2021 packed with milestone achievements, you wonder when anyone at Huboo would have any time to factor in a frame of pool or a spot of climbing.

In February, it opened its fourth warehouse in and around the Bristol area at South West logistics hub Avonmouth, where it created hundreds of jobs.

In June, it began to scale its ‘micro hub model’ into Europe, opening its first site outside the UK in Eindhoven, The Netherlands.

Events space at Huboo's head office in Bristol. (Andrew Arthur)

Then, in September, it announced it was set to open a 4,200 sq mt logistics centre in the Spanish capital Madrid, with plans to roll out its services across multiple European markets over the next year.

This will be funded by a £60m investment raised during a Series B round, led by Mubadala Capital, the financial investment arm of an Emirati state-owned sovereign wealth fund, which the business closed in October.

Huboo’s meteoric rise hasn't gone unnoticed. It was recently crowned Large Business of the Year at the BristolLive Business Awards.

It was also identified in a Government report as one of three companies within Bristol’s burgeoning tech sector expected to attain a ‘unicorn’ valuation of more than $1bn over the coming years.

Around the table in the boardroom, Mr Bysh, Huboo’s chief executive, explains the firm's longer-term expansion plans are not merely confined to Europe.

“We do [have ambitions to scale to the US], but not on this round. Everything for us is funding driven. Right now The Netherlands is done and working, Spain we’re just setting up, just signing off on the warehouse in Madrid.

“Germany, we have identified where we want to be. So that’s hopefully going to come online towards the end of [2021]. It won’t be fully functional but hopefully we will have a warehouse in place in Germany. And the plan is to do something like another 10 [in 2022]. And that’s basically Europe done.

“We might set up a few smaller bases in some of these additional countries. But in the midst of this roll out about eight months from now, we will probably seek funding again for the States. It’s an expensive business going into the States so another round and we’ll head over there, whilst Europe continues to roll out."

Mr Bysh, a former computer games programmer who previously ran a market research company, says it is “weird and difficult” to reflect on the journey Huboo has been on since its formative days.

“I don’t quite believe it now. We intended to be where we are now, but did we ever really believe we would? I mean, you have to be sensible about these things, the odds are always against you. Fundamentally, it’s been about funding and willingness to take risks.”

He met Mr Dodd, a former distribution and logistics manager with Proctor and Gamble and now Huboo's chief technology officer, on the sidelines of their sons’ Saturday morning football training in Bath.

The pair struck up a friendship over a shared interest in their respective careers and soon began exchanging ideas for a new venture.

According to Mr Bysh, Huboo started as an idea from Mr Dodd for a company that would collect post if the recipient was not at home or work, and store the undelivered post in local collection hubs - hence ‘Huboo’.

Gradually the pair began to hone in on fulfilment and a hub or 'micro warehouse', as the key pieces of the idea.

Mr Bysh explained: “A big fulfilment company printed their data a year or two ago, and they said the average picker in their business walks 10 miles per day. Miserable jobs.

“Paul’s insight was that actually, if you insist your clients only deliver enough stock for a short period of time, you can shrink it all into a micro warehouse and the person isn’t walking 10 miles a day, they’re only walking half a mile a day."

The duo's idea was to have one person who deals with all the inputs and outputs - the picking, packing and posting, and the frontline support.

“In our hubs now, a hub manager might manage one client if it’s a big client, and might have 30 clients in their hub. And they will be the first line of support for those clients, so will get that kind of feedback that you wouldn't normally get in a warehouse job.

“It’s more like retail really; you open your own shop, you come in, deal with your clients, you shut the shop and you go home.”

Martin Bysh, pictured right, with Paul Dodd (Huboo)

Mr Dodd began refining the company’s order and billing software system at the Safestore in Bath, before the venture had any customers. He even bought test stock, such as boxes of chocolate, to ship and sell before Huboo had secured any small e-commerce businesses as clients.

Mr Bysh said: “We’d been meeting up, talking about it constantly, I had been mentoring Paul, and I was really excited about it by that point. I was hating what I was doing, running what was now somebody else’s business.

“So I offered to come in, take a piece and commercialise the business. If it works out, I‘ll raise some funds, and we will quit our day jobs and do that. So that’s what I did.

“I got about 60 clients within about six months. We became PayPal’s fulfilment provider in the UK, at which point we realised this did have legs. So we raised our first £1m and just went from there.”

Mr Bysh remembers the first venture capitalist looking to invest in the fledgling Huboo being “visibly shaken” when they came to visit their base at Safestore.

“It was a tiny little room. We had one person working in there, it was packed in as tight as can be. But there was this fantastic guy called Tommaso from PayPal, we got on incredibly well with him and I think charmed him, and he thought ‘screw it, let’s take a punt.’

“I think we signed up something like 30 PayPal clients within a couple of months, only because brave people like Tommaso were willing to take a punt on two idiots from a Safestore in Bath.”

Since 2018, Huboo’s annual turnover has risen from £61k to £17m. Despite the challenges of the pandemic it hired around 150 new employees in 2020, took on more than 50 new clients a month and is now planning to create hundreds of more jobs in Europe as it expands.

The establishment of its new European bases in 2021 was made that more remarkable given Coronavirus restrictions surrounding travel.

Huboo has developed ‘digital twin’ 3D models of all its warehouses to carry out instant, detailed health checks on its hubs, without the hassle of the physical process.

It’s a feature that adds to the scalability of Huboo’s model, with Mr Bysh describing each hub as “a Lego brick of fulfilment.”

The company’s continental growth was also aided by a group of its interns, who took on a greater level of responsibility found on the average work experience placement.

Mr Bysh said: ”Paul and I legally couldn't go to Germany or anywhere in Europe. They were locked down, they wouldn’t accept you. We spoke to consulates, we tried to tell them we wanted to come over to start a business, to spend money, to create jobs - but they wouldn't let us.

"In the end we had one intern in The Netherlands, Nazra, and three European interns [in the UK], a French girl and two lads; one from Spain, one from Italy. They could travel in Europe, so we sent them over to meet Nazra. We got a flat for them so they could live out there, and just let them set the business up for us in the Netherlands.”

Bristol e-commerce firm Huboo's new warehouse in Eindhoven, The Netherlands. (Huboo)

Within a matter of weeks the interns had found Huboo’s Eindhoven warehouse and kitted it out, while liaising with HQ back in Bristol.

A couple of months later Huboo had a business that was running in The Netherlands, in a warehouse that was fully stocked and shelved, and they had hired 20 staff. All of the interns are now full time employees across the company's operations in Spain and Bristol.

Mr Bysh said: “It was a real test of the headless ops. We believe we have a system that is so phenomenally complex to build but so simple to roll out, now that it’s all driven out by our software and systems, that you shouldn't need to have a long background in ops or be an engineer in order to roll it out or to manage it.

“It wasn’t supposed to happen that way, but honestly, I can't imagine it being easier or more seamless than it was, it was extraordinary. Kudos to those amazing guys for rolling that out.”

Mr Bysh admits not everything was as straightforward during the pandemic, especially as staff shortages arose from Covid-related absences.

Employees across the business, right up to senior leadership were redeployed to help out with “picking, packing, and sorting” in warehouses. Each member of staff within the business trained as a hub manager.

Mr Bysh explained: “One forklift driver goes down with Covid or test positive, all forklift truck drivers, as they mix together, are gone. So we lost all our quality assurance staff at one point, we lost all the client implementation managers at the same time, only one of them had Covid, but we lost them because of the ‘pingdemic’.

"We got to a point where we were struggling to get stuff down from the shelves. We found ways to cope with all of these things, but it caused huge problems."

Mr Bysh said the firm had also lost a "huge number" of people who returned home to Europe during the pandemic - and admitted it had been "hard work" to get people in.

“The difference between us and other typical warehouse businesses is the churn rates in our warehouses are miniscule," he said. "These are great jobs that people like doing. The biggest problem we have with churn is people churning internally as they get jobs within the business.

"Something like 50 people have moved up from the warehouse floor into other areas of the business. We want that to be the case.”

Mr Bysh said the shift towards online retail from high street stores, catalysed by the pandemic, had helped Huboo's growth, though the staff shortages already outlined and sudden spikes in certain products, made that growth complex to manage.

“When lockdown started, we had garden shears flying off the shelves and home educational kits, all that kind of stuff," he said. “We also had massive single spikes. Initially it was hand gels; half the business was shipping hand gels for months.

"That eventually died down and we don’t really sell gels anymore; now it’s huge numbers of tests. That too will die down in a couple months time I imagine."

"So we had these massive spikes at the same time as this underlying growth. It’s not a time you would want to be growing in, but some businesses were shut down, so we definitely can’t complain; it wasn’t easy to grow during that period, but we did.”

Huboo's head office on Corn Street in Bristol. (Andrew Arthur)

One change to working life brought about the pandemic that Mr Bysh is unhappy about, is what he describes as the “sudden discovery that everyone is entitled to work from home".

It comes as reports emerged last year that the government is considering introducing laws that would protect flexible working conditions, which would include allowing employees to request to work from home from their first day in a job.

Mr Bysh said: "It’s human nature. You give someone a privilege for any length of time and they then consider it a right. They forget that it is a privilege.

“During the pandemic people were forced to stay home. It seems to be for a certain class the lesson they have learned is that staying home is really nice, and they’re going to do it forever now and feel they should do as they are entitled to because of work-life balance.

“It’s actually where work-life balance falls. It’s a ridiculous thing, ‘I don’t have work-life balance unless I am home four days a week’.

“But the reality is that only happened because other people were working in warehouses packing stuff for you, collecting your bins, driving your buses."

He added: “My guys in the warehouse aren’t going to be able to request to work from home, because there would be no job for them.

“This is a horrible imbalance. This is not a direction we should be going in as a society I think. The fact is there is a debt owed to those people that have worked for the last 18 months, and the way it is being paid is to demand more. This to me is very ugly.”

So what is the next target for the business? To be the size of Amazon.

"We don’t care whether Amazon continues to exist or not, we have no desire in defeating Amazon. But we do think this is potentially a $100bn business we are sitting on here.

"The next round for us, in eight to 12 months, should be a raise of £200m or £300m, and ideally a valuation of about £2bn.

"Probably two years from now we should have 30 bases across Europe and we should have launched in the US. If that works, then that’s a big business."

An Amazon built in the West Country?

Mr Bysh replied: “Yes, that would be nice.”

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