August 9, 2011
An exciting development that I’ve known about for some time but that finally goes public today is the news that New Zealand based Cloud POS vendor, Vend (see my GigaOm piece on them here) has secured a new funding round from German venture capital group PointNine Capital. Interestingly enough, PointNine is also the team that was behind the early funding of some stellar SaaS successes – Zendesk, FreeAgent and Clio.
Vend was funded by well know Kiwi serial entrepreneur Vaughan Rowsell, and had attracted an angel round from Sam Morgan and Southgate Labs, the investment vehicle of a triumvirate including Rowan Simpson, along with heavy hitters Michael Koziarski and Amnon Ben-Or. Those two parties enjoyed perhaps New Zealand’s most successful technology exit the sales of TradeMe to Fairfax. Both Simpso/Southgate and Morgan haven’t been slouches in continuing investments with notable gambles on Sonar6, Xero, a host of other for-profit startups as well as a number of philanthropic initiatives.
In terms of the Vend investment, POS is a space that is ripe for activity. As I said in my GigaOm post;
Retail POS is a complex area ripe for disintermediation; traditional POS systems require retail stores, who aren’t generally comfortable or up-to-date with infrastructure and software maintenance, to have their own on-premise servers and maintain software. Using the cloud computing theme of abstracting IT management away from the end user, Vend is a new approach to POS systems. It’s one of the first examples of a persistent cloud app that runs directly on the front lines of business with hardware that’s little more than a standard PC with keyboard and mouse.
Since launch, Vend has enjoyed rapid growth – they now have customers in 80+ countries and are processing $10M in sales every month (as a comparison, Square, with its massive hype and funding, is processing $4M in transactions daily – not quite the huge difference that one might have expected). Vend is also hiring to bulk up its team and is opening an office in San Francisco later this month.
Vend isn’t releasing the amount of the funding but I’m led to believe that it’s in the low seven figure range and includes a second round of funding by Sam Morgan and Southgate Labs along with newcomers Lance Wiggs and startup lawyer Sacha Judd.
In talking about the opportunity for Vend, Rowsell pointed out that while Square is only processing the credit card transactions a retailer has, Vend processes every transaction – cash, credit, debit etc. He’s also quick to talk up th synergies between Vend and Square saying;
Also would like to draw the parallel that we are not the same as Square (they are payment, we are the tools retailers use to run a store), in fact Square + Vend is a great combination. But Vend works with any mobile payment solution like Square,Google Wallet, Intuit GoPayment etc.
There is a definite opportunity for Vend, and this will only increase as location-based customer loyalty programs become the norm – connect these to a mobile device and one can see how a cloud-based POS like Vend can be the central hub for a retailer. Rowsell references this opportunity saying;
In our first year we wanted to prove you could move POS entirely to the cloud and make it work for main street retailers everywhere. We have done that. Next comes the really exciting innovation, where we start to roll out tools for store owners to better connect with their customers, let them tap into mobile payments, and integrate with more and more online platforms
If success was predicated on being a nice guy, Vend would make it just because of Rowsell. It takes more than being a nice guy however so luckily Vend is onto a really exciting space.