M&A was very much off our radar when we presented our 2020 budget to our board in December 2019. The world looked a little different than it does now.
But then, only three months later, at the peak of COVID-19 uncertainty, we had the opportunity to embark on our first acquisition.
Getting M&A right isn’t easy, but when executed well the positive impact is massive
Anywhere between 70-90% of all mergers and acquisitions fail to produce positive results, according to the Harvard Business Review. But M&A can be very powerful when done right. I’d go so far as to say that M&A are a unique and underutilized path for startups to unlock additional value for both the company and the shareholders.
Over the past year, sennder has built up significant expertise in using M&A as a growth strategy. We’ve done three acquisitions and one aqui-hire within just 18 months and set up a joint venture with Poste Italiane. Simultaneously, we’ve expanded from 200 employees to over 800 and opened six additional offices - all during an unprecedented pandemic. Easy is probably the last word I’d use to describe this process. But it has worked for us, and I would like to share with you how.
sennder's first M&A activities were all about digital freight forwarders
The rationale behind kicking off this approach was to use M&A to clearly position sennder as the number one digital road freight forwarder in Europe.
We acquired Uber Freight Europe, our financially most powerful competitor, and Everoad, our largest digital competitor in France, and aqui-hired the team at leading Spanish digital freight forwarder Innroute. Additionally we set up our joint venture with Poste Italiane - sennder italia - which is now Italy’s largest domestic FTL freight forwarding company with over >€100m in revenue.
And the outcome? We consolidated the market and put sennder in a leading position versus the European competition, as well as for investors. This is a clear win for us, especially compared to the US market, where multiple large and well-financed companies like Convoy (~$670m raised), Uber Freight, (>$500m raised) and more like Loadsmart (>$145m raised) and Transfix (>$125m raised) are still fighting for market share.
Every time a company does M&A, they learn more about how best to achieve success
We learned a huge amount from our first M&A activities.
Our “one platform” principle for tech paid off: This ensured that there were no legacy systems slowing us down, and therefore no need to “stitch together systems” on the backend. We migrated all acquisitions onto one single tech platform within a few months. This is more work upfront, but it’s worth it.
We (over)invested in culture integration and knowledge sharing: This provided a streamlined, organized way for acquired teams to get to know us and, of course, for us to get to know them. We decided to run a version of our regular new employee onboarding program, “sennder Academy,” for the employees joining us from the acquired companies, in addition to a buddy program.
On top of that, we encouraged employees of the acquired companies to share their current ways of working via a “Reverse Academy.” When everyone has a chance to learn about and reflect on the strengths and weaknesses of both sides, the result is a stronger company and more connected employees. The COVID-19 pandemic made this point both more challenging and more important, as all of this was taking place virtually.
We empowered key talent, especially from the acquired talent side: Getting acquired is a big change for people from the acquired organization. That’s why we made sure we weren’t just tacking the acquired organizations onto ours.
This approach helps two different companies merge faster and fosters a sense of responsibility for the company as a whole, rather than as separate parts. We gave key people even more responsibilities in the combined organization. For example, Uber Freight's general manager became sennder’s COO. In the case of our acquisition of Everoad, a local product lead became a sennder VP, and we kept sennder France as a tech hub - and actually expanded it.
sennder’s continuing growth strategy will involve traditional asset-light forwarders
This month we acquired the Netherlands-based traditional FTL freight forwarder Cars&Cargo, taking our M&A strategy to the next level and evolving it further. After consolidating the digital freight forwarding market, we understood that we could use M&A to do even more. We can use it to grow certain aspects of the business in a very focused way by improving access to capacity (i.e. trucks), driving tech adoption in the market, and building up niche competencies quickly (e.g. in specific geographies).
There will be more news in the coming months regarding new additions to the sennder family from more traditional parts of the logistics and transport industry as we further evolve our approach to M&A.
M&As are a great way to grow, but keep the specifics of your industry and region in mind
To other founders looking to leverage M&A as a growth strategy for their startup - consider it, carefully! It might not be for every company, especially in fields where there are simply no legacy players. But with the right mindset, an M&A growth strategy that you continually adapt to your needs can serve you well. It has certainly been the right choice for sennder.