Investment Notes: Partly

Blackbird has led a Series Seed round in Christchurch-based startup, Partly.

Partly is a global SaaS-enabled marketplace for auto parts. The magic is its young, ambitious team solving a messy problem with juicy network effects in a large but unglamorous industry.

Partly was born out of two obvious yet unresolved problems – that there isn’t a purpose-built inventory management solution for auto parts businesses, and that most auto parts live offline. This means lots of lost time and money for businesses, and a convoluted shopping experience for buyers.

Partly will bring this traditionally offline industry online, giving a massive boost to sellers and making life easier for buyers.

Auto parts globally is a $1.9T market, split roughly 67% OEM and 33% after-market parts. Only $82B of that is spent online. Although 74% of auto parts buying journeys start online but only 11% are completed there. In the US alone, there are 350k auto parts businesses and the majority do not sell online. COVID-19 has accelerated e-commerce forward by 5 years and auto parts is one laggard industry that is rushing to catch up.

Finding a Needle in a Haystack

The team’s key insight is that for the auto parts category, the part number or SKU itself is not sufficient to make it discoverable and sellable online. Rather, the critical information is the compatibility of a part and other compatible parts, vehicles and makes (known as fitment data). Fitment data is extremely complex, with over 320,000 vehicle models, 400 million part types and 18 trillion connections between them. One part could be compatible with thousands of vehicle makes and models.

If you are a seller, you want to make sure your item appears under searches for all compatible vehicle models.

If you’re a purchaser, you probably just want to search by the part type and refine your search from there by vehicle model and other product attributes, not by part number.

The problem is that fitment data is not aggregated right now, and standard e-commerce platforms are not built to show this level of relational complexity from a search and inventory management perspective. This explains why parts sales have been so slow to move online.

Enter Partly.

There are 2 distinct products: PartsPal, a mobile-based SaaS inventory management system for auto parts businesses that integrates with e-commerce platforms like Shopify, Trade Me (New Zealand’s version of eBay) and soon, eBay and Amazon. As well as creating listings on these platforms, a listing is created on Partly, their own online marketplace for auto parts.

The beauty of Partspal is that every new customer brings more fitment data, and more fitment data brings greater visibility in search listings and more sales to customers.

Partly is currently focused on growing PartsPal, which brings in subscription revenue and helps Partly build up enough supply to eventually fuel the marketplace, where it will also take a commission on sales.

The Whole is Greater than the Sum of its Parts

Partly is a pivot from the consumer New Zealand-only marketplace AllGoods. AllGoods was founded by childhood friends Levi Fawcett and Nathan Taylor. Levi is a lifelong motorhead who grew up building go-carts and racing them (with his co-founder Nathan). His second job was repairing and prepping high-performance vehicle engines.

Levi studied mechanical engineering and his first job straight out of university was as Rocket Lab’s first hardware simulation engineer. He built the Electron Hardware Simulation team and then the Internal Infrastructure Team at Rocket Lab before leaving to start AllGoods. He was drawn to the deep engineering challenges of building a rocket engine, but rockets are not Levi’s first love – cars are. When I asked Levi what the greatest learning he took from Rocket Lab was, he said: “ambition”.

Consumer marketplaces are incredibly hard businesses to build and Levi and Nathan have acquired many learnings that they take with them into Partly. Early hires from AllGoods are joining Partly as co-founders.

Levi’s passion for cars is matched by his commitment to customer happiness. For PartsPal’s very first customer, MagWarehouse, Levi worked onsite and built them a Shopify site that integrated with Partspal, Trade Me and eBay over two weeks. He slept overnight at MagWarehouse to get the migration done.

We love seeing founders ‘in the weeds’ (or in the workshop!) with their customers like this and are excited to welcome Partly to the Blackbird whānau!