For Barry Conlon, the issue was not raising money to fuel growth at Overhaul Group, the Texas-based supply chain software business he co-founded in 2016. Instead, it was deciding who he wanted to take the money from.

The company had previously raised $27.5 million bewteeen a seed capital and a follow on Series A funding round in 2020. For the Series B round, Conlon, a former member of the elite Army Ranger wing in the Irish Army, wanted more than just capital – he wanted a strategic fit.

The company’s rapid expansion – headcount and revenues have tripled in the past year – had not gone unnoticed and a total of 80 potential backers submitted a formal interest in participating in the round. Indeed, the level of interest was so great that Conlon did not even appoint an investment bank to advise on the deal.

Instead, along with his Irish based co-founder Dave Broe, Conlon first whittled the list down to 15, and then to a shortlist of three. In the end, Broe and Conlon settled on Macquarie, the Australian investment bank and financial services company.  

Macquarie are leading the $35 million round, which is announced today and which is also being backed by Edison Partners and Avanta Ventures, the investment arm of CSAA Insurance Group. The terms of the deal have not been disclosed, but the Conlon confirmed that the founders remain majority owners, signalling a valuation of several hundred million dollars.

“The most significant thing about this raise is who we raised it from. It was not my highest offer. It was not even close to my highest offer. But it was really, really smart money,” Conlon says, adding that the money has been earmarked for investment in engineering and development.

“Macquarie are a powerhouse. They are an incredibly customer as well as an investor. They own the Port of Long Beach. Brussels Airport. Everyone else is raising from growth and private equity funds. But I see this as strategic.”

Overhaul, which is headquartered in Austin, Texas and has its European headquarters in Dundalk, Co Louth, is operating in a hot space. Project44, a rival player in the supply chain visibility sector, recently raised $202 million, a deal that gave it a $1.2 billion valuation. Conlon said he could have raised more but that he was determined not to overcapitalise the business.

“We are incredibly capital efficient here. We just know how to run a business. It is not our first rodeo. You don’t overcapitalise. You only raise what you need. I am not sure we need a Series C round to be honest,” he says.

He added: “I do feel we are on a strong trajectory towards unicorn. If I was to raise another round, it would be for a very good reason and it would be at a unicorn valuation. That is comparative to what I see around me in terms of competitors.”

Conlon’s decision to pick Macquarie was also informed by his experience with FreightWatch International, a company he founded that helped protect cargo from hijackers. The company was acquired by United Technologies and has since been rebranded as Sensitech.

“We were looking for patient capital. My biggest problem with my last gig was when we got a knock on the door from a Fortune 50. They offered a deal that no one was going to refuse, especially when you have professional money on your board. The IRR was just insane, so you do the deal,” he says.

“I was the only one there saying that should wait a year and put a zero on it. But you lose that argument. I was not going to do that again. I want to realise value. And that was part of our discussion with Macquarie.”

“Just scratching the surface”

I last interviewed Conlon at the beginning of March 2020. His company had just raised $17.5 million, with Edison Partners, a $1.6 billion growth equity firm, stumping up $15 million of that figure. The rest came from Abbey International Finance Group, a Dublin based finance house that previously put seed capital into Overhaul.

Conlon was back in Dublin for a number of days and was returning to his adopted home in Texas. Shortly after we spoke, Covid-19 disrupted everything, including Overhaul. However, despite the pandemic, the company has grown exponentially over the past year.

In March 2020, Overhaul employed around 50 people globally. Today, it employs 100 people in Austin and around 30 in Dundalk. It is currently hiring a further 50 people.

“We are being wooed fairly aggressively from our friends up North.”

Speaking from his base in Austin, Texas this week, you can feel the excitement in his voice, and his intent in building the business. He is ambitious but polite.

“Our footprint from a headcount standpoint has tripled, our revenue tripled, everything has tripled. Everything has accelerated – not because of Covid but despite Covid. It has been phenomenal, but also a rollercoaster ride. The value of visibility to businesses is being realised and recognised,” he said.

“Covid helped us because it validated that there is value in having supply chain visibility. Transparency and visibility was much sought after. The validation process that can take five years to ten years – for people to see if this is a real thing or not – it just happened overnight.”

Overhaul’s technology allows real-time visibility on fleets and cargo, and the company has developed AI products to predict supply chain disruptions and recommend resolutions. This is something that can assist Overhaul’s customers to avoid costly and time-consuming shipping delays. It also helps companies automatically correct noncompliance, such as a driver going on a detoured route. Customers include the likes of Microsoft, Dell and Sony.

It recent times, prompted by customer demand, it has entered the lucrative space of insurtech. While the company initially worked on cargo, it is now using its software in the cab of a truck to help customers reduce insurance premiums or fight claims.

“The auto liability market is broken in the US,” Conlon says. “We are bringing the visibility to the cab so owners can get more information to help deal with their insurer. Real time situational awareness around insurance is being fed to the owners of the insurance product so they can better manage risk and not get a claim – and when they do get a claim, they are better able to deal with it.  It is another demonstration of how visibility can change worlds.

“Our product is called TruckShield. It is not another black box going into your cab. We are an App. A turnkey solution. In partnership with the insurance from the cargo, we have gone into the cab, and it has opened up a $60 billion market that we were not playing in before.”

AI and the supply chain

Overhaul is operating in a high growth space. Supply chain leaders are considering year on year cost-cutting measures while examining how emerging technologies such as AI, robotics, and blockchain will potentially have long-term impact to their bottom lines. By 2023, at least 50 per cent of large global companies will be using AI, advanced analytics and IoT in supply chain operations, according to global research firm Gartner.

Data from McKinsey, meanwhile, states that companies that aggressively digitise their supply chains can expect to boost annual EBITDA growth by 3.2 per cent—the largest increase from digitising any business area—and annual revenue growth by 2.3 per cent.

The future

The company’s Irish base is in Dundalk, Co Louth. However, in recent times, the authorities in the North have been attempting to attract Conlon to move across the border. As an Irish funded company headquartered abroad, Overhaul is part IDA and part Enterprise Ireland.

He is committed to expanding significantly on the island of Ireland, but he has not decided just where. “We are already getting a lot of talent in the North. We are talking to both sides right now. Let’s see what happens,” he says.

“We are in Dundalk right now. And we are being wooed by the authorities in the North. They are very interested, and it is a very interesting location for us. It is an easier place to hire than Dublin.”

What has prompted the rapid expansion over the past year? “Digitisation, and bringing data fields together, is not new. People have been talking about big data for quite some time,” Conlon says.

“What is really changed is that we have demonstrated the benefits of the business to our customer base, and they are willing to talk about it. Their losses are down. Their claims are down. There is a proven return on investment. The industry has accepted that not only is this a good thing, but it has also become a critical factor in their business practices.”

He adds: “There is just so much going on. When you scratch the surface a little bit deeper, there are just so many opportunities. That in itself is a problem because you could end up just speculating and chasing opportunities. We are trying to stay focused. The insurtech investment is a good example. We did not necessarily have that specific opportunity in mind. But quickly you realise it was fit for purpose for us. There are probably a few more of them along the way.”

Conlon said the company has already been fielding approaches from potential purchasers, but that he was committed to growing the business further.

What Macquarie said about the deal:

“Overhaul’s ability to create full visibility, security, and connectivity in the supply-chain market is an unprecedented feat for the industry,” said Jared Doskow, managing director of principal investments, Macquarie Capital Principal Finance, who has joined Overhaul’s board as part of the investment. “Overhaul is leading the industry into a new era of providing unparalleled data, intelligence, and transparency while creating opportunities of digitization in what is only an analogue or physical-documentation space. We’re proud to work with Barry and his team as they take digital transformation to a whole new level.”