They have just raised a £1,000,000 seed round. Interview with Douglas Warden, CEO of EzTenda
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I come from a fintech world, and when I started this interview with Douglas Warden (CEO of EzTenda), I honestly didn’t know much about the drinks listing industry.
However, I rapidly saw similarities.
There is a fragmented offering from the drinks industry with big brand names and micro labels on one side, and small venues and giant groups on the other.
And just like most financial markets, there are too many parties involved for this to be managed effectively with simple human interactions alone. When it is, it’s mainly based on long standing connections.
The drinks listing industry really needed their online marketplace.
A marketplace is about bringing value to both sides. Making everybody’s life easier, helping them grow and then receiving a % of that value as remuneration.
EzTenda is doing just that by allowing hospitality venues to post drinks tenders and brands to bid on these tenders in an ebay style auction.
It’s a fascinating industry and Doug showed so much passion it was quite infectious.
I asked Doug to give me a quick 30 seconds on the business, here is the video transcript:
“Hi startupmag. My name's Douglas Warden. I'm the CEO of EzTenda. EzTenda is a digital marketplace where we believe drinks brands and operators in hospitality do business better. And why do we think they do business better? Well, essentially, in the physical world and how things are done in the past drinks, brands will sell their products to wholesalers.
Wholesalers will then sell them onto the operator and there won't be as much interaction between drinks, brands and operators. And there's too many for drinks brands to get around in, in, in the country. So by digitising this process, we connect them directly and they can work together.
It doesn't take out the wholesaler entirely. You know, that route to market still happens in exactly the same way in terms of physical flow of products. It's just the drinks brands can then offer discounts, promotions, and work directly with venues to promote their products.”
Let’s start with the basics:
What is a tender?
To get things rolling, I gave ChatGTP a whirl to see what the bot came up with:
A tender is a formal offer to do something, typically to supply goods or services at a specified price and within a specified time. In business, tenders are often used when companies are seeking bids from potential suppliers for goods or services. This process allows companies to identify the most competitive price and the best supplier for their needs. Tenders can also refer to the process of making such an offer, or to the document that contains the offer.
Well played openAI.. a very decent definition. This tech is becoming quite exciting (scary)…
How do tenders work on EzTenda?
In the case of EzTenda, bars/venues can sign up to post their tender for free.
And brands can bid on these tenders with a listing fee, free stock, retro discount and POS budget.
The venue can review and rank brand offers and the brands can then up their bids to secure the deal.
Once the tender is closed, the venue will choose who wins and a digital agreement is made between the two parties.
At EzTenda, they call this a match and it’s one of the main KPIs being constantly worked on by the team. The more matches that are made, the more value the marketplace is bringing to its clients.
This whole process currently happens every day but it happens offline. It’s a very painful and oldschool and it’s mainly driven by personal connections.
EzTenda is taking this to the digital age and it’s pretty exciting.
During the chat, I had to stop myself thinking about all of the ways this could grow. And Doug was very good at hinting at potential!! (as I said above, this was a very infectious conversation :-))
2 rounds of pre-seed funding for EzTenda
Doug joined Eztenda after securing their first investment.
At the time EzTenda’s founder Sam Showering had just raised a £560,000 pre-seed round in October 2021. This was under the SEIS scheme.
For their latest round, and as SEIS is limited to £150,000, EzTenda raised a £1,000,000 seed round under the Enterprise Investment Scheme (EIS).
Let’s have a look a quick look at the key differences between SEIS and EIS:
SEIS
- Maximum business age: 2 years
- Maximum number of employees: 25
- Maximum gross assets: £200,000
- Maximum investment: £150,000
- Corporate investors allowed: No
- Funds must be spent within: 3 years
- Initial tax relief rate: 50%
- Capital Gains Tax relief: Yes
- Loss relief: Yes
EIS
- Maximum business age: 7 years
- Maximum number of employees: 250
- Maximum gross assets: £15M
- Maximum investment: £12M
- Corporate investors allowed: Yes, but no tax relief
- Funds must be spent within: 2 years
- Initial tax relief rate: 30%
- Capital Gains Tax relief: Yes
- Loss relief: Yes
This recent fundraise will allow EzTenda to continue to work on their tech and grow the liquidity of the marketplace.
I’m very curious to see what happens next. The strong stickiness of this app for venues could lead to tons of new product development and the power for large brands clearly has potential for buyouts. And that’s without talking about international expansion..
Exciting times ahead for Doug, Sam and their team!!
