Move Guides, one of our very first investments as Beacon ( then Angellab), closed $48 million in Series C funding last month. We were the first investors in the company and it is, almost to the day, five years since we participated in its seed round. Move Guides has since raised over $90 million in follow on funding and is now reshaping the $5BN corporate relocation industry, offering a “digital” alternative to the outdated “analogue” offerings of the incumbent relocation companies.
This is perhaps a good time to reflect on, and revisit, our rationale for investing in the business. Was it the size and structure of the market, the quality of the product or the talent of the team that weighed more in our decision? Was our decision stochastic, or the result of a rational analysis and a methodology which we should aim to replicate?
We invested in Move Guides when the business was only just starting to engage with their first pilot customers and the product was in “alpha” at best. That was early even for us who, back then, were a syndicate of angel investors accustomed to high levels of risk. So why did we do it?
First and foremost, the CEO and founder, Brynne Kennedy, is an individual of rare talents: a strong character, she comes from an entrepreneurial family, was an elite gymnast and athlete competing at the highest level, has an MBA from a top school and had worked in rigorous investment banking and VC environments beforehand. She also had some domain expertise having experienced multiple relocations. She had an excellent partner in Steve Black, ex-associate partner at Oliver Wyman, whose somewhat quieter demeanour (though no less driven) made him an ideal partner. It would be easy to say, in retrospect, that we knew all along that Brynne and Steve would succeed. But at that point in time the only thing we knew was that they had a combination of skills that could create a “high octane” culture to drive performance. We also fundamentally believed that they would attract the necessary talent and assemble a team that would execute on the plan.
Secondly, I happen to have an understanding of the “ Global Talent Mobility” market from my relevant work in Andersen and Ernst & Young overseeing their corporate relocation business process outsourcing (BPO) services. This helped us form the view that corporate relocation is one of the few markets that had remained “analogue” due to its complex supply chain. Incumbent BPO providers treat employee mobility management as a series of disconnected process that overlap with mainstream HR processes like payroll and compliance and run low tech, low Gross Margin models and outmoded user experience based on phone and email. Internal corporate units could not justify the CapEx to automate the entire business process of employee movement and the BPOs were ridden with mostly legacy technology with archaic 3rd party connectivity and only basic data analytics capabilities. This was an opportunity for a SaaS solution.
Finally, we had a “gut feel” that the market was sufficiently big – a billion plus – though at that time was difficult to definitively say how big. In a VERY simplistic way, we knew there were 700 thousand corporate sponsored moves a year and each move was worth $4,000 which made the corporate relocation – assuming a reasonable growth rate – a $ 11bn market in 2021. Questions around “teleworking” and the effects on mobility were eroding somewhat our conviction but we firmly – even irrationally one might argue given how little we knew back then of how employee mobility might evolve – believed that businesses will continue to send people around the globe to build their local presence: the “corridors” of movement might change but the overall volume will not only not contract but will continue to expand and the “millennials” will strenuously object to the old school relocation practices.
There is still a long way for MoveGuides to go but they, from day one, were positioning themselves to become a market leader with an offering that provides unbeatable customer service while operating a high gross margin, scalable business model. If they carry on at their current velocity of displacing the incumbents and gaining market share, they may give Europe one more unicorn success story.
Looking back it is always easy to rationalise one’s decisions, especially if they seem to have been the “right decisions”. The team was exceptional, we had an insight into the market pains and we thought the market was sufficiently big to merit the risk (high) vs rewards (even higher, we believed) trade off at that particular point in time. The business is now at an amazingly exciting juncture, though there is still much work to be done.
Also published on Medium.