On Digitizing B2B Markets and Backing Industry Insiders
Our work with Rooser, the first European seafood trading platform
A bit more than three years ago, we announced our investment in cargo.one by publishing a blog on P9 Land called “On digitizing B2B markets and building trust relationships with founders”. It was a good occasion for us to write about the digitalization of the air cargo market and share a few thoughts about how we like to work with founders. Since then, the company has developed nicely and reached the next stage of its growth, raising a Series A from Index and a Series B from Bessemer within a few months of each other. Luckily for us, another marketplace entrepreneur named Nico — the founder of what was at the time a pre-launch B2B marketplace called Rooser based between France and Scotland — read our post and decided to reach out. For those who speak French and are curious, take a look at his email from 3 years ago:
We invested in Rooser a few months later and today, we are very happy to announce that the company is coming out of stealth with a 23M€ Series A led by Index and Google Ventures. This feels like another good occasion to speak about marketplaces and how we like working with founders, although this time we’ll add seafood into the mix ;)
The post starts with some context on the seafood value chain, explains how Rooser is digitizing it and ends with a bunch of anecdotes as to how we’ve worked with Nico, Joel and their team since that initial email.
The undigitized seafood value chain
Up until today, most of the innovation in the (sea)food value chain has happened at the end of the value chain digitizing restaurants or consumer purchasing behaviour. This led to the creation of companies like P9 Family member REKKI for restaurants or food delivery platforms like Delivery Hero on the consumer side. But if we look upstream in the value chain, a lot has to be done for seafood to go from the sea to our plates. It first goes through boats that sell their daily/weekly catch to primary processors (mainly through auctions). These processors then process the fish (to make it simple, turn whole fish into filets) and sell it to wholesalers that sell it to restaurants. If we look at Europe only, there are tens of thousands of intermediaries (ca. 140k) that are working every single day to make sure that we can buy seafood in restaurants, at fish markets or at the supermarket. An industry figure is that a single fish changes hands (ie. is traded) 7 times before its final destination. Every single day (and often before 10AM), almost all of that is managed via phone calls, emails, and more recently Whatsapp.
Enter Rooser
Rooser is digitizing this activity with a trading platform where primary processors and wholesalers of seafood connect every single day to buy and sell their daily productions. Rooser displays prices and quantities available for thousands of SKUs, improving transparency for everyone involved and ultimately leading to a better market equilibrium.
Why is it exciting?
Disruptive innovation
Like air cargo used to be before cargo.one, seafood remains largely undigitized. Primary processors mostly use paper-based rate sheets, share updates on daily prices and quantities on Whatsapp, and make deals over the phone. It looks mostly like the stock market used to be at the beginning of the century: people negotiating (sometimes shouting) every day over the phone. If you’re picturing Wolf of Wall Street-era stock traders shouting at each other over the phone, you’re not too far off :) In this industry, digital trading infrastructure is a game-changer.
Strong marketplace dynamics
Due to the short shelf-life of fish products and uncertainty around daily volumes (the daily catch is difficult to predict)sellers have very high incentives to sell their products fast. AoVs are of decent size (10–100x larger than what we’re used to in consumer markets), buyers and sellers order tens of products every day, and prices can fluctuate a lot. This makes for awesome marketplace dynamics that any marketplace theory nerd will appreciate.
Opportunity to build software for both sides on top of the marketplace
Since 2015, we’ve been writing about SaaS-enabled marketplaces. The under-digitization of the seafood industry makes it such that there are still many untapped software opportunities. Rooser enters the market through trading but will be able to gradually build software for both sides like inventory management or ERPs.
Embed financial products to provide more value to both sides
We’re increasingly convinced that software players like vertical SaaS players (Amenitiz 👐) or B2B marketplaces have a great distribution channel and great data to build and distribute disruptive financial products for their industry. Rooser offers payment terms to sellers and buyers that make their offering very competitive and will ultimately increase Rooser’s topline.
Positive environmental impact
In the early 2000s, the seafood industry’s reputation was tarnished by a few scandals linked to overfishing. Overfishing had (and has) a dramatic impact on biodiversity, sometimes leading to the extinction of different species. Even without overfishing, the inefficiency of the industry still results in close to 30% of fish being wasted somewhere along the value chain, meaning one in three fish never makes it to a plate… Digitizing the value chain and making it more efficient will ultimately lead to better traceability of the production and lower waste. Backing meat replacement businesses like Mission Barns in the 🇺🇸 and Gourmey in 🇫🇷 and helping existing industries digitize themselves is our way at P9 to contribute a little to a more sustainable evolution of the food value chain.
How we’ve worked with Joel and his team
Beyond this more macro perspective, and since that initial email from Nico, our collaboration with Rooser has been very joyful. The company was pre-launch when I first chatted with Nico and Joel, Nico and Thomas had never built a tech business before. We mistakenly passed on the pre-seed (that our friends at EoS and SIB led at the time), but we kept chatting every month for about a year and led the seed round when the first transactions started coming in. By then, we also brought on P9 Family members Olli and Moritz, the founders of cargo.one as well as Ronen and Diogo from REKKI as investors and advisors to the business. All of us have done our best to help Joel, Nico and Thomas hit the ground running and transition from running seafood businesses to running a tech company. Part of it was making sure Erez, the ex-CRO and COO of GoCardless, got to meet Joel and the team to discover the wonders of the seafood industry, thanks to an assist from Ricardo.
I’ll stop there. Time to eat some fish!
⛵ Fair winds and safe sailing, Rooser team ⛵
