Partly, founded by a former Rocket Lab engineer, completes the largest Series A raise in New Zealand history

Partly has raised $37 million at a $180 million valuation in what it calls the largest Series A raise in New Zealand history.

The Christchurch-based company was founded in 2020 by former Rocket Lab engineer Levi
Fawcett – and Fawcett’s ex-boss Peter Beck was one of the backers of a previous $1.7M and $3.7M seed raise.

Partly has created a database of hundreds of thousands of different auto parts that manufacturers, retailers, and online marketplaces can access when they want to manage, source, or sell parts. (This appears directly in the area “Surely someone has already done this?

The startup integrates with eBay and Shopify, and its client list includes two unnamed Fortune 500 companies and the United Nations World Food Program — one of Partly’s biggest clients, as it operates in many underdeveloped countries and has therefore developed an in-house service Repair shop for around 30,000 vehicles.

Fawcett says the value of auto parts processed by his system has reached a monthly run rate that implies annual volume of $150 million — and is growing 30 percent monthly. “Indirectly” $4 billion worth of products are ordered through its system – a large number in itself but still a small part of the global auto parts market valued at $1.9 trillion.

Partially takes a secret clip of the ticket. Subscriptions for the data management tool, universal vehicle database, global auto parts catalog, and other services start at $10,000 per year and depend on customer size and other factors.

With hyper growth and no direct competitors, Partly could become New Zealand’s largest tech company within five years, according to Fawcett. Its trademark is Wellington-based Xero, which has a market capitalization of around $12 billion.

His ambitions are global. Some of the new funding will be used to double the workforce to just over 100 over the next year. The founder says many of the new hires will be offshore, particularly in Europe.

“But New Zealand will always be our engineering center,” he says.

“We have a large customer base and prioritize key customers mainly in Europe,” says the founder.

Fawcett says Partly will make money in a few months but will focus on growth rather than profit over the medium term.

He won’t reveal the financials, but they were attractive enough for a $37 million raise at a time when much of the venture capital industry is shutting the hatches.

Fawcett says that while his company ultimately set a record, it was evident that the level of startup scrutiny had risen several notches.

“The due diligence that was performed prior to receiving a term sheet was almost as extensive as the entire due diligence that was performed in our last round,” he says.

The round was led by London-based Octopus Ventures – one of Europe’s largest VCs (reportedly investing around £200m a year), with backing from three Australian VCs – Square Peg Capital, Blackbird Ventures and Ten13 (led by Steve Baxter—one). of the sharks on Australia’s version of shark tank), New York-based 12BF Global and local companies Hillfarrance and Icehouse Ventures.

Was it the largest in New Zealand history? “Wow – I can’t think of a bigger one,” said Mark Vivian, a partner at Movac, our largest VC, when the Herald presented him with the sum. “But definitions are getting blurred these days.”

Eight arms holding you

While many in the VC industry are ducking their heads — in part because it’s so much harder now to raise money from the investors backing their funds — Octopus executive Malcolm Ferguson said recently Financial Hours: “The first two years of a recession cycle are often among the best to invest in a company.”

In many cases, valuations have fallen, leading to more lively deals.

But Ferguson had three broader reasons for backing an early-stage company during a slowdown.

Businesses have access to better talent as larger companies lay off staff, funding constraints reduce the likelihood that a rival will emerge – giving companies more breathing room, and incumbents will be less likely to develop a competing product.

you say hood…

Fawcett believes his company can be massive because it has no competitor. In most areas where it operates, it challenges paper-based, or at least creaky, databases that don’t communicate very well with each other – resulting in slow, error-prone systems with lots of returns.

Why does it have the field to itself? According to its founder, simply because what it does is so hard.

“Partly was born out of a huge unsolved data problem,” says Fawcett.

In total, there are around four billion combinations of parts that can be ordered for different makes and models of cars.

That’s gnarly in itself, but it’s made even trickier by different companies and countries using different descriptions.

Some are obvious. What Americans call “hood”, other countries call “bonnet”. But there are thousands of other mismatched naming and numbering conventions as well.

Partly’s global team consists of data scientists, engineers and automotive veterans who develop extremely precise algorithms that enable buyers to find all the right car parts simply by looking at a license plate.

Partly has its own PartsPal software for selling auto parts, but it’s also creating an API — or application programming interface — that allows automakers, online marketplaces, dealerships, and dismantlers to communicate with each other’s databases using standardized parts descriptions that everyone can understand.

With the company looking to double in size over the next 12 months, Fawcett is looking in part for employees with experience in the automotive and e-commerce businesses. One of Partly’s early employees was Kiwi native Tony Austin, who ran Amazon Global on the other side of the Tasman Peninsula. But most of all, he’s after Brainbox data scientists who are set to join the company’s teams in New Zealand, Australia and Europe.

“We are looking for the world’s most outstanding software developers who are passionate about solving difficult problems. We have a truly exceptional team across Australasia and Europe and are currently only hiring about 1 percent of applicants, so the bar is incredibly high.”

Partially successful

Fawcett is already doing well.

In a Nov. 29 update from the Companies Office, Fawcett was the largest Partly shareholder with a 38 percent stake — valued at $68.4 million at the valuation of $180 million used for the raise of series A was used.

But as in previous interviews with the heraldhe wears a down-to-earth black t-shirt – reminiscent of the de facto uniform worn by Rocket Lab employees.

He says he no longer speaks to Beck once a month, but the Rocket Lab founder remains a mentor and they are in regular contact. (Beck has backed several startups, including smart cow company Halter, founded by fellow Rocket Lab engineer, Craig Piggott).

And like Rocket Lab, he says it partly grows overseas but keeps its heart in New Zealand.

“There’s a very good chance we’ll end up with more employees in Europe and the US just because of the size of the markets,” says Fawcett.

“We won’t be able to grow sustainably here, but I definitely see New Zealand as a key engineering center for a very long time to come.

“We have a people who are strong generalists; that no-8-wire mentality of just knowing what needs to be done and figuring things out, knowing what needs to be done. I think that’s a superpower for a lot of New Zealand engineers.”