This post is part of Accel’s Secrets to Scaling series, where leaders from across our portfolio share their learnings and advice with the next generation of European and Israeli entrepreneurs building global winners.
Since its launch in 2015, sennder has become the leading digital European freight forwarder, offering shippers access to its connected fleet of more than 40,000 trucks. Co-founders David Nothacker, Julius Köhler and Nicolaus Schefenacker have not only expanded across seven countries and grown the team to more than 900 people, they’re revolutionizing freight - one of the world’s most traditional industries - and bringing it into the 21st century at an unprecedented pace. The level of transparency, efficiency and flexibility that sennder offers has never been seen or experienced in this space before. Earlier this year, the company also hit a key milestone, surpassing a $1bn valuation.
sennder’s journey so far has seen a pivot, huge organic growth, international expansion and more M&As than most startups will ever experience. Getting to this point has taken determination, ambition, strong values and a willingness to keep testing. I sat down with David to discuss his learnings and advice for the next generation of entrepreneurs...
Tell us about your journey from consulting to entrepreneurship. When did you know you were going to be an entrepreneur?
I was surrounded by entrepreneurs from an early age. My father is my role model. He is an entirely self made entrepreneur.
I started my professional career in consulting on an internship, where I met sennder’s co-founders Nico and Julius. At home for Christmas, my two brothers and I realised we’d gained a couple of kilos. This led to a conversation around healthy nutrition. One of my brothers was working for a startup in Berlin. He told us they provided fruit and healthy snacks, and asked why this didn’t exist in Switzerland, where I worked. Over the holiday, we developed a concept, set up a website and, in January, we launched a company, delivering fresh fruit, vegetables, and healthy snacks to offices in Switzerland. We did this for about eight months before we realised it wasn’t scalable. We were profitable, and it was a decent business, but it wasn’t worth our time, so we sold it. It’s quite big today in Switzerland!
I decided to do an MBA, and that’s when the big change occurred. I did a project with a team put together by the university for the founder of BlaBlaCar, and I took all the entrepreneurship classes I could. After graduating, I decided not to go back to consulting. I moved to Berlin with my first MBA co-founder, where we tried to use the empty capacity of buses to offer same day delivery for parcels across regions that weren’t served by Amazon, Zalando and the like. It took us a year without a single customer to realise it wasn’t a smart idea.
Things got difficult after that. We found an angel investor who offered us €500,000. But, five minutes after signing the term sheet, my then co-founder told me he was going to leave. We planned to give up and file for bankruptcy, but my father convinced me to try one more thing and convince the investor to still give me money. I called the investor who invited me to his place where I met his family, negotiated a deal, and shook on it. He told me I wouldn’t fail - I was now part of his family, and they wouldn’t allow it. I’d never felt so much pressure in my life. So much so that on the way back to the airport I considered turning it down.
I didn’t, of course. I moved back to Berlin and called Nico to say I had a company, €500,000 coming my way, a couple of ideas and would he be interested in joining. Fortunately, he said yes, and from there things began to turn round. We changed the business model, got the big ecommerce companies on board, and things just went crazy. Julius joined us a few months later in January 2017, and the three of us built the company together. After our first funding round with Scania, we were able to draw a salary. Today, we’re at about 900 people. And we moved into a bigger place as the three of us had all been living together in a 48 square metre apartment!
What do you wish you’d known at the beginning that you know now?
It was definitely an intense learning process. I didn’t realise then the size of the commitment you have to make, and how long you have to make it for. Everything takes significantly longer than expected, and it’s not as if you can say you’ll do something else if it doesn’t work within the first couple of years. Nor do you want to. If you’ve taken money from your friends, family, and VCs, you’re in it for the long run. This was the reason I didn’t want to give up, even though the original business model didn’t work.
Looking back, I guess I should have spent much more time doing my homework so that I knew what I was getting into when I made the leap into entrepreneurship.
It felt a bit like I’d jumped into cold water and I thought I could get out at any time I wanted, but that’s not the case. Entrepreneurs who do it properly get used to it. They have to stick to their plans for a long time – longer than you think.
This is a good point. Our partnership with companies is, on average, around 10 years, so it’s indeed a very long commitment for the founders. Let’s flip to the business itself. sennder is a multi-headed business. It’s B2B and B2C. It’s operational and it’s tech. You’ve been through many acquisitions, a pandemic, and you have offices in seven countries. What gives you the energy to fight the fight on so many different fronts every day?
Even if you’re really hard-working and have the right idea, there are so many things that need to come together at the same time. I realise that I’m very privileged – the right timing, the right investors, and the right opportunities all cropped up when I needed them.
When I started out, I always thought that if someone made the right offer, I’d be out. Now, if someone came along with a good price, I wouldn’t be as willing to sell as perhaps was in those early years. It’s been a unique, once in a lifetime opportunity that a lot of entrepreneurs would love to experience - I couldn’t have asked for more. It gives me the energy to say: “Let’s go with it. Let’s enjoy this ride as long as I can.”
Freight is one of the oldest, most traditional industries in the world. How has sennder managed to build credibility and trust in this Jurassic environment?
Firstly, we’ve been extremely lucky. There's one thing I also see throughout the organisation and that’s the fact we really try to look for a personal connection with the small truck driver with a tough job and then broadly across organisations in an old school industry that’s very sceptical about using technology. Looking for and having this human connection as a starting point to build something from - whether it's a business relationship or digital process - is what has enabled us to do a few things right and scale quickly. We also built a reputation around customer service and quality that allowed us to deal with some of the largest shippers. In many ways, we’re serving both enterprise (shippers) and SMB (trucking businesses), so understanding how each segment ticks was key.
How do you think about sennder’s values today? With such a varied set of people in the business and across countries, how do you unify this, and what are those values?
We’ve opened seven offices in the last eighteen months and hired 500+ people in the last twelve months. We’ve moved on from trying things out, not really overthinking, and just going with the flow, to becoming a more structured and process-driven organisation. Keeping our core values during this transition is tricky, especially as they’re like the values you’d find as part of a family where you only see your cousins once in a while, but you still have a personal connection and care about each other. It’s about sticking together, believing in, and fighting for the same thing.
The core culture sennder tries to embed in all of our acquisitions is about caring. We give directions from the top down, of course, but we make sure we always take the personal aspect into consideration. It’s a challenge to ensure we maintain that as we scale.
Let’s talk about the acquisitions, which have been very bold. You’re in the pandemic with no idea what’s going to happen to the trucking industry, and you make a huge acquisition. How do you think about and quantify risk? And what are your learnings on M&As, as you’ve done a lot more than most startups?
I look at it from a risk/return perspective. The acquisitions of Everoad and Uber Freight were all about the deal structure. Both opportunities were hard for us to refuse for different reasons. We managed to consolidate the market with these acquisitions. With Uber Freight, we joined forces with possibly the last player that could have caught up with us given sufficient funding. And that put us in a very interesting position, because numbers two and three are a fraction of our size in Europe – that’s unique compared to any other continent. In the US, for example, Uber Freight competes with Convoy, Transfix, Loadsmart and others.
In a marketplace where network effects and size matter, being in this privileged leadership position changes a lot of things. The way we’re seen by investors enabled us to raise our Series D, for example. It’s changed our position in the market too. The joint venture we did in Italy with Poste Italiane means we’re now the country’s largest domestic trucking broker. It’s completely changed the dynamic. Instead of chasing carriers and asking them to use our platform, rather than giving their capacity to someone else, carriers are now dependent on us because we have the volume.
It’s changed the unit economics. After three months, we were profitable on a monthly basis, and closed the year with a positive seven-digit EBIT. It shows that once you have the network effect, you can generate more value than anticipated. It’s also why we decided to pursue M&A activity. We’re in a position where we’re already the largest and can now increase the network effect, getting the flywheel spinning smoothly in other countries - the same way we have in Italy.
What learnings have there been around keeping these values and integrating these acquisitions – especially being remote?
Over-communication is key, ensuring everyone understands what’s going on and what their future looks like.
And it’s important to appreciate the company you’re acquiring. There were definitely some learnings in the early few weeks of our first acquisition when we were measuring up who was the “coolest kid” in the relationship. You need to appreciate that it’s not a case of “this is our way of doing things, you should get in line.” When defining the transition, you must benchmark where you all are, and who’s better in which areas. There’ll be areas where the other company will excel, so you shouldn’t be afraid to shift things around.
We have an onboarding academy for new starters at sennder, and also use it for every acquisition. We then turn it around, so the team from the acquired company presents to the sennder team on how they did things. This concept of communication linked to appreciation was an important learning.
It’s important, too, to think about how to properly incentivise the key leadership in an acquisition. If you lose the leaders, then the rest of the organisation will probably break down and implode. We were acquiring companies for their teams, senior leadership, local knowledge, and competencies. Transitions are always difficult – they’re always linked to uncertainty, so it’s vital to align incentives. The first few weeks after an acquisition are a difficult, critical time. It’s important to make sure the management shows a long-term commitment and reassures the team. We manage this by building a personal relationship and making sure it’s in their best interest to stay. This has enabled us to keep everything together, with a relatively high retention of employees, and as smooth a transition as possible.
What did you discover about yourself as a leader, and particularly as a CEO?
My biggest learning actually came from a discussion that you and I had. Several people joined the organisation early, and I was concerned they’d hit a ceiling in terms of the complexity they could manage. While I was still on top of things personally, I was afraid this would happen to me too.
You told me that, as CEO, my role had changed, and I had to do two things. The first was to be a visionary, bringing the vision to the company and inspiring the people around me. The second was to manage people, ensuring I recruited, managed, and retained the best talent. As long as I did these things, I’d do a good job in my new role.
So I moved away from being operational and involved in all of the details, to being more of a people manager, listening to people’s challenges, trying to understand and offer comfort, convincing new talent to join, and setting the company’s strategic direction. My role today is completely different to what it was 18 months ago.
You’re now an angel investor. If you had to step back, what advice would you give entrepreneurs looking for venture capital?
There’s not one piece of general advice. Every entrepreneur faces different challenges at different stages, so will need different types of advice. If someone’s at an early stage, I encourage them to test things out. I learned this in my entrepreneurship classes. A solution doesn’t have to be perfect, but you have to make sure that what you’re building has product-market fit and people really need it and will use it. I made this mistake myself. My same-day delivery idea worked in theory, but no one wanted to pay for it - I should have done my homework better.
I recently advised an entrepreneur who wanted to acquire a company in order to scale faster to first enter into a partnership. Before undertaking a complex, time-intensive M&A transaction, they had to make sure their hypothesis of cross-selling made sense. Testing is key - I’d always advise entrepreneurs who’ve just raised money and are thinking about putting it into something big to test before investing.
In terms of fundraising, there’s never been a better time for European entrepreneurs to start a company. There’s a lot of money in the market. Investors are paying high valuations and are more bullish on some higher risk bets.
But my advice is that who you bring on board matters perhaps more than money. If you’re joining forces with someone for a long time, you need to be sure you like each other. Otherwise it can be very painful.
If you have two term sheets on the table, you need to go with the firm who is a good fit from a personal perspective, and that matches your values. This can be one of the many elements that can help a startup succeed. Take time to understand who the investor is and consider whether you want to work together long-term. The firm’s team, brand and signalling make such a big difference for a company. Having you and the Accel team on board has made a huge difference - you’ve helped us to think bigger and be even more ambitious.
Being an entrepreneur can be stressful and lonely. How do you manage the anxiety and pressure that comes with being a founder and keep yourself healthy?
I didn’t set out to create it, but I’ve ended up with a safety network around me in both my professional and my personal life. Professionally, even though I’ve stepped up as CEO, my two co-founders support me and drive the business. Personally, I have my girlfriend and my family. I feel safe. I feel I can make a mistake here and there and not fear losing my job. This safety network gives me the confidence to take a little more risk and be more relaxed when there’s uncertainty.
I also focus on healthy nutrition and exercise. My energy levels are higher and stay for a longer time period. Doing some sport before or after work really helps with focus – and I sleep better too! With the pandemic halting travel, I found it was easier to fit in exercise and keep a regular schedule. Right now, it’s keeping me engaged and giving me the energy I need for this phase of sennder.
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