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Grand Rapids start up envisions $1B in revenue

3:57 PM, Oct 27, 2013   |    comments
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 (Nathan Bomey/Detroit Free Press Business Writer) - If Garrick Pohl gets his way, FedEx and UPS may eventually be a distant memory in the intra-city delivery business.

The Michigan entrepreneur co-founded courier software start-up Zipments to give retailers and businesses an delivery option for packages that don't need to travel a long distance.

Founded in Grand Rapids, the service connects businesses with professional couriers in major urban markets, facilitating delivery deals that otherwise would go to the major shipping companies.

By creating a software application that serves as a clearinghouse for professional messengers and couriers, Zipments is giving companies a cheaper and faster option to deliver packages such as sensitive documents and medical samples. The company takes a 5% to 20% cut of each transaction - and the rest goes to the courier.

The start-up recently secured a $2.25-million round of seed investment from a group of investors that included Ann Arbor-based Huron River Ventures and Grand Rapids-based Windquest Group.

In an unusual arrangement for a young company, Zipments is maintaining dual headquarters in Grand Rapids and New York. Pohl's family lives in Holland, but he splits his time between the two offices.

Pohl, who co-founded Zipments with technical minds Elliot Nelson and Travis Brack, said he's committed to keeping the company's software development based in Grand Rapids. He expects Zipments to grow from about four employees in Grand Rapids right now to about 20 in the next 18 months and 100 within a few years.

"There's a lot of talent here," Pohl said. "We have this combination of risk-takers and talent together that are willing to help build some of these younger companies into something much bigger."

As a serial entrepreneur, Pohl said he's convinced for the first time that his company could grow to a billion dollars in revenue. Zipments estimates that independent couriers complete about $4 billion in shipments every year.

But Pohl contends that the company can also generate additional demand for messengers by offering courier shipment services to online retailers. For example, you could buy a product online and opt to pay for a local courier to deliver it to your apartment instead of paying for a FedEx shipment.

"We aim to do what a lot of smaller companies have done in a lot of different industries, which is to come out of nowhere, do something slightly different and hope to get a lot of market share," Pohl said.

But Pohl had to cast aside the company's original vision to get to this point. When it was founded, Zipments was focused on providing a way for individual people to find other individuals to deliver items for them.

Pohl quickly refocused the company on businesses as the customer and couriers as the conduit.

"Today we largely focus on business-to-business and business-to-consumer delivery - anything from a retailer wanting to get product to customers to two businesses that are trying to move anything from documents to auto parts between themselves," Pohl said. "Typically you'd funnel to UPS or FedEx for three-day shipping. If it's local, we can take that and do it within three hours."

Officially, Zipments is currently available in Grand Rapids and is in beta mode in New York. But the company has quickly won over couriers and even New York City's economic development organization, which invested in Zipments.

The service will work best in extremely dense urban environments where couriers flourish. Pohl said he believes the service will catch on quickly.

"There's no other occupation I know of that's better connected worldwide than bike messengers," he said. "These guys know each other in cities all over the world."

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