XeroE provide same-day and next-day delivery services and aim to encourage businesses to switch to sustainable, emission-free deliveries. Launching in Bristol with existing customers Bloom & Wild and Love Yourself, XeroE expect to make 6,000 deliveries each month and to grow to 50,000 by 2024. City Funds has invested £100,000 in equity into XeroE and we sat down with founder Steve Evans to talk about his hopes for the business.
What social or environmental problem is XeroE trying to solve?
The environmental problem we’re solving is toxic air in urban areas. That’s the thing we want to change. Our vision is that all urban deliveries are made using emission-free transport. And our contribution to that is providing companies with the option to make their deliveries emission-free. We’re eliminating the vast majority of emissions produced by delivery vehicles by providing deliveries by bike, cargo bike, electric scooters and electric vans.
How is your commercial value proposition connected to the impact you want to make?
First there’s the ethical angle: we’re seeing a large proportion of companies that want to make that delivery’s emission free but can’t because there simply aren’t enough emission-free delivery options.
But also, there’s the commercial angle: our clients want to differentiate themselves in the marketplace through their sustainability credentials. That may be customer acquisition or retention or both. But they absolutely see a commercial angle to their delivery choices.
What this means is that our value proposition is directly related to our impact: when we increase the number of deliveries we make, we reduce the number of polluting deliveries on the road. So as our revenue increases and our company grows, our impact grows.
Tell me about the major milestones you’ve hit and why you needed investment.
We signed a massive client called Bloom and Wild last June which meant we could instantly turn on next-day deliveries in London. We leased our own set of electric vans in January, and we hit £100k monthly sales in March this year. And, of course, secured a funding round this spring.
Why did you seek out impact investors, rather than pursue typical sources of investment?
Strategically, we saw that impact investors would be able to facilitate the right networks to help us grow. And we also believed that an investor who values impact would more intuitively understand what we’re trying to do, and therefore look on our pitch more favourably.
How are you going to use the funds, and how is that going to benefit Bristol?
The funding is going to help us expand in London and Bristol, and then open in three other UK cities this year. It will be used mostly for marketing and working capital for the local launches in Birmingham, Cambridge and then Manchester.
The City Funds contribution is earmarked for growth in Bristol. As our impact directly relates to the number of deliveries we make: the more we deliver in Bristol, the bigger the impact. Our financial and volume targets in Bristol will directly equate to the impact we can have on urban air.
By 2024, we’re aiming for 1600 deliveries a day. This will remove 144,000 kg of carbon dioxide, 500,000g of nitrogen oxide and 12,500g of particulate matter from Bristol’s streets. That’s 6% of total contribution, which we’re incredibly pleased with.
In terms of jobs, we’re bringing on 2 full-time employees in Bristol and will be adding roughly 125 couriers. We’re incredibly proud of this because all our jobs are quality jobs that people value. Because we care for our employees, we’ve had none of the problems that seem to plague the gig economy.
Congratulations on a successful funding round! What do you know now that you wish you knew when you set out?
The size of the funding industry. Sitting between investors and entrepreneurs, there is a whole industry full of gatekeepers. If you’re not careful, you’ll spend your time with a lot of time wasters and a lot of forms. Often the response you’ll get is “computer says no.”
What I discovered is that it’s much more important to try and develop referrals and introductions, rather than going down the standard route of filling out forms online. This forces you to really select the funds you want to go after and pitch directly to them. We targeted City Funds because of the Bristol-impact angle, which is exactly what we wanted to do. This targeted approach helped us to leapfrog a lot of the bureaucracy that’s built up in the sector.
What’s next for XeroE?
After Bristol, we’re looking at Birmingham, Cambridge and Manchester. And then rolling out nationwide. But having discovered that funding takes as long as it does, we’ll likely start our next funding round sooner than later!
Deal overview
Business name: XeroE
Website: www.xeroe.co.uk
Mission: To enable people and organisations to access environmentally friendly transport when and where they need it.
Value proposition: Emission free deliveries in line with your sustainability claims
Sector: Logistics
Legal form: Private Limited Company, certified B Corp pending
Amount and type of investment: £100,000 equity