Bungii closes $3M funding round led by Midwest backers
Kansas City-based Bungii, an on-demand truck transportation service app, announced the close of their Series A round this month. Co-founder Ben Jackson said the startup closed their oversubscribed $2 million funding round at over $3 million. Jackson said that he takes great pride in the fact that the large majority of the round was raised…
Kansas City-based Bungii, an on-demand truck transportation service app, announced the close of their Series A round this month. Co-founder Ben Jackson said the startup closed their oversubscribed $2 million funding round at over $3 million.
Jackson said that he takes great pride in the fact that the large majority of the round was raised from sources right here in the Midwest.
“I’m proud Bungii is a Midwest startup and I’m proud that we were able to raise an oversubscribed Series A funding round specifically in the Midwest,” said Jackson. “That was a goal we had since day one.”
Jackson said he received several suggestions to go straight to the coasts for funding, but he wanted to prove that the Midwest sees value in investing in its startups and entrepreneurs.
“I wanted to make it a point to see what we could do,” said Jackson.
Bungii worked with high-profile, local investors, like Sandy Kemper and Scott Coons at Perceptive Equity. Jackson said Perceptive Equity’s CEO, COO and CMO are all available and willing to chat at any time, something he doubted he would find with coastal investors.
“Even yesterday they were in our office helping us work through problems and talking about strategy,” said Jackson. “The fact that we’ve had a team that knows what they’re doing, who’s had a [nearly] $300 million exit themselves, be that accessible is a huge bonus for us.”
The founder described Bungii as being like Uber, but for pickup trucks, to help move and deliver large items. Bungii can help with everything from Craigslist finds, to store purchases, to hauling away junk after a Spring clean.
The concept has been successful. Bungii is working on pilot programs with Kansas City-area Costco and Pottery Barn locations and is seeing a 25 percent monthly growth rate. But Jackson said the lack of funding was holding the company back from scaling.
“Three months ago we were at the point where we had rock solid software in place, we had an efficient and affordable customer acquisition model, and we had an outstanding team,” said Jackson. “We were primed and prepared to scale on a national level, but the only thing stopping us from being on a national level was the funding to get there.”
That success has been hard won for Jackson and co-founder Harrison Proffitt.
“When we launched in Kansas City, we’d spent a year-and-a-half on the concept, and we’d been to three different development companies trying to get the app out,” said Jackson. “We were really excited to launch but as many novice entrepreneurs [tend to do], we thought we were going to just launch our product and go running off into the sunset. What happened is quite the opposite.”
Jackson said the weekend Bungii launched, their truck made four trips for a total of around $49.
“After spending a year-and-a-half developing this and hundreds of thousands of dollars on the software, we were absolutely crushed,” said Jackson.
The co-founders sat down and looked at their options. Jackson said they decided they could make excuses about the timing and location of the launch, or they could put their heads down and get to work.
They chose the later and made a list of 100 different ways to find customers.
“For the next six months, we spent our time pursuing [our top ten] with everything we had,” said Jackson. “We got to the point where we knew exactly what actions drove demands and which actions didn’t. We use that as a playbook now for launching new cities.”
The Kansas City launch was tough, but it taught the team how to be successful and launch quicker moving forward. That knowledge is essential as they worked through Bungii’s launch in Lawrence and now Atlanta, and strategically look forward to additional markets.
“There are a number of different factors that we look at when adding potential new markets to our expansion list including market size, partnership opportunities, and the proximity of local colleges/universities, to say a few,” said Proffitt. “On top of that, we take app activity and general interest from people who live in the prospective cities into account. A few on our launch radar are Phoenix, Miami, Indianapolis and Denver.”
For Atlanta, the city already had a high volume of Bungii app downloads, it is the second highest city for Google queries involving terms related to truck rentals, and it contains a specific demographic of women who are frequent users of the app.
“These users use Bungii six to eight times a year as opposed to one to two times a year,” said Jackson. “80 percent of our trips happen in Overland Park, Kansas [which fits that demographic]. Atlanta has a similar neighborhood called East Cobb. [We thought] if it works in Overland Park it will work in East Cobb and thankfully, about a month into it, our assumptions are correct.”
However, success in a new market doesn’t mean that unique challenges and obstacles won’t arise.
“In Kansas City, it was relatively easy to find pickup truck owners to sign on to our platform, while Atlanta has proven to be quite the opposite,” said Proffitt. “We quickly had to adjust our strategy to solve the driver acquisition problem rather than focus solely on finding demand.”
So far, they’re seeing impressive traction in Atlanta with numbers exceeding the ones they’ve seen in Kansas City. That traction is welcome news for the co-founders who have bigger plans on the horizon.
“By the end of 2018, we hope to be in 12 different cities across the nation,” said Jackson. “It’s a big goal, but we’re really excited about it. Because we’ve raised this money, we’re ready to expand.”
Christine McGuigan is the Managing Editor of Silicon Prairie News.
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