Ontruck, began its journey in November 2015 under the direction of Iñigo Juantegui and Antonio Lu. Both entrepreneurs created this startup as the “uber” for freight transport. Ontruck makes it possible to reduce the percentage of empty kilometers of carriers by more than half because, through its technology, it helps carriers to optimize their routes as much as possible. The last round they raised was 17 million euros in June last year, this round is allowing them to accelerate the development of the Ontruck transport network.
How many investment rounds have you raised with Ontruck? And how many rounds do you think are necessary for a startup?
At Ontruck we have 4 rounds of investment: A Seed, a Series A and a Series B and we have just made an extension of the B series.The standard investment round model for startups is usually, a first seed round to be able to generate scale with a proof of concept that seems to be scalable in a specific region. Then Series A has the objective of growing, at that time you are not profitable but you want to grow quickly and much faster than conventional companies have grown. Next, Series B and Series C, those of pure growth, are the ones where you are already starting to look for a profitability model, you are gaining network and scale economies and there is a point on the horizon where you already know that you will be able to be profitable. Thereafter, subsequent investment rounds are simply to grow faster or to open new lines of business, when you already have a solid business model that is capable of earning money.
Obviously this is the standard model, then you will see the case of Uber and companies that are not profitable today and that have raised billions of euros in investment. And then the opposite case, Booking.com, which only needed two rounds of investment and was already profitable from minute one. But obviously it depends on the sector and the needs of the company. We have followed the standard model of investment rounds quite a bit.
What anecdotes do you remember about these funding rounds and which of them was the biggest?
The biggest round was very difficult because at that time we were growing a lot but we were also with very large negative margins, in a very short time we had to convert to having positive margins (with 20 points difference in just 3 months). But it was at that time that several funds bet on us, and we were able to close the round with a French fund that saw that we would indeed be able to grow.
What is your vision of mega-rounds (million-dollar rounds) of investment?
It is true that funding rounds have a part of success in the sense that you have demonstrated that you have a successful business model in which someone bets and is willing to invest their money, but the fact that your company needs all those millions also has its negative side: “The more money the more pressure”.
What recommendation do you have on how to invest the money from the rounds so that the capital returns more?
I think that to explain it better, we can do a simile with diet. When you are going to run a marathon or are preparing for the 100 meters straight, the diet you follow is important, it cannot be too scarce because otherwise you end up dying of starvation and not too much because otherwise you get fat and don't run. So I think it's a matter of diet, and then of your ability to digest that diet. We, for example, receive too much money and too soon. I wouldn't say too much money and too soon because it's the investors' fault, it was by no means his fault, but I made worse decisions because I have more capital and come on I'm very clear about that. At the beginning, having a shortage of resources helps you to prioritize focus and that's the key to being able to be strict, to say no to things, you're focused on a few things and you make sure that they work. What happened to us is that when we had enough money in the bank, 70% of your attention is on one thing but then you do 2,000 more and that when the core business is not super trite, what it does to you is that you are not on one thing or the other, and what it does is create problems for you. Moral: Achieving too much money too early in the company leads to errors. Sometimes, although it seems contradictory, having a shortage of resources makes you stricter and more cautious about what you spend and allows you to better prioritize.
What do you think of public funding/non-dilutive funding?
Non-dilutive financing is always a good option. Although a very positive thing about investment in equity and venture capital, in general, is that they assume the same risk as the entrepreneur, on the other hand, in non-dilutive financing, there is a part of the grant (grant) but then there is a part that you usually have to end up paying back, it is usually debt with cheaper conditions than the risk of your company, but you still have to end up paying for it. In that sense, I think that it is key to be clear about the business model and the growth model. We have had the possibility of taking on a lot of debt and that allows us to have runway without diluting ourselves. Right now we feel in a situation of greater confidence to collect debt from banks and public entities, because we are very comfortable with the business model, we are clear about the capacity for growth and that we will be able to return it. But debt shouldn't help you grow from minute one, you shouldn't experiment with debt, that you have a very short period to return. You have to grow up a lot to be able to repay the debt. So I would say that depending on the time it's better or worse.
What do you remember as the worst and the best moment of Ontruck?
Well, I think the worst could be that it was during the biggest investment round we closed, which I remember I even had to be taking pills to be able to sleep, a bit of a borderline situation. And the best part, I think that now, we are in a solid moment with Ontruck, I am very confident in the business model and the future of the company. I personally have never been more confident in Ontruck's business model and future.
Did an Oil & Gas fund recently enter your funding table, how do you see that this will affect you in the company, will your green trend/sustainability increase?
Our goal was always to reduce empty kilometers: if we managed to reduce the waste of time and energy that the sector has, we could generate a virtuous cycle in which we had a good margin, customers are paying less and carriers are making more money, and all this by reducing empty kilometers. This creates a direct impact on the amount of CO2 that is emitted under vacuum, on the amount of pollutant not linked to productivity. We never expressed it that way and that's when the OGCI Climate Investments fund came to talk to us and they asked us to measure what impact we were having on reducing kilometers. A nuclear physicist came to give us an analysis of the impact of our algorithms and thanks to them we saw their equivalence in reducing CO2. We saw that we were generating a lot of impact almost without realizing it, but that's because our business model is perfectly aligned with the reduction of unproductive CO2. The only way for us to survive and be profitable is to reduce empty kilometers. Right now we are very clear about it and in fact we are now promoting it. OGCI Climate investments, is a super serious fund that, by investing and believing in Ontruck, has given us a seal of guarantee, that we are indeed having a positive environmental impact and has given us two things: the ability to demonstrate that what we do is not silly, due to the hard auditing process you go through and then it has also given us a lot of ideas on how to manage the company, the board, etc. The people in the background have a lot of experience, and their input has been super positive.
Are good entrepreneurs serial entrepreneurs?
I think everyone has their own path, it depends on each person. For example, my partner in the red fridge was a crack and he decided that his path was venture capital. There are people who need or like to have their minds on a single product and go deeper into that and other people who like to work with several projects at the same time or in other types of positions. When I set up Ontruck, I went on a reasonably long journey to think about what I wanted and I wanted a project that would have an impact that I could control and measure. It seemed to me that setting up a company will cover that better than with other types of projects. I even considered doing social projects, NGOs, etc. at the time, but I saw that there my capacity to generate impact was lower, so I discarded those projects.
Did you regret complicating your life again by starting a business?
Well, I'm not going to lie to you. Sometimes yes, in bad times you ask yourself, What am I doing here? But then the good times are incredible. If I look back at what I have learned these 5 years at Ontruck, I don't think I would have found any other place where I could learn what I'm learning, nor have the exposure I'm having to the feedback of my own decisions. One thing that is critical to learn is that you make certain decisions, certain risks and then you can measure the degree of reality that was in your decisions and that you can make others again, taking this feedback into account. I consider that the feedback cycles in a startup are very short compared to those you get working in a multinational where they are very long or in consulting where they are non-existent. In a startup, and more In a CEO position, you learn under a lot of stress but also at a very high speed. Having that feedback and being able to measure the impact of your actions so quickly fills you up.
How do you handle the change of role from entrepreneur to director, manager of a large company?
I had my doubts about how I was going to go through the process and at what point I would consider that it was no longer the right size for me, but for now I'm not there. For now I am enjoying every phase of the process and looking forward to growing more and becoming bigger.
What do you think are the most complex tasks of a manager?
The biggest learning I take from the role I play is having to say no. Among the two most complex tasks of a manager are, on the one hand, knowing how to say no and, on the other hand, managing and motivating people.
How do you handle the personnel management part?
The technical part of managing people, such as establishing processes and points of contact, is a part that I am still learning today. The softer part (empathizing, managing emotions, etc.) I think I'm naturally better at it or at least I have more resilience when it comes to withstanding surrounding pressure and being able to help people with both personal and professional problems. One of the lessons I learned during my time at Ontruck is that we tend to think that work doesn't mix with personal problems, nor do they affect each other and that's really not the case. The reality is that we are human and that difference doesn't exist. It shows a lot at work when you are well and at peace with your personal life and when you are not well. I've noticed that there's no difference between hard and soft skills. They also call Soft Skills, the subject of managing emotions, but to me the truth is that it seems to me the most complex part and it is the most important part when it comes to having a motivated team.
What do you think of the philanthropic side of Spanish entrepreneurs?
I know many entrepreneurs who have given part of what they had or have promised to give part of what they were going to earn. An example that I know relatively closely is Juan de Antonio, CEO of Cabify, who has given practically everything he has earned (either he has reinvested it in the company or has intended to do philanthropic models, etc.). Statistically, Spain is a very generous country. I think I once read that it was one of the countries where the most blood was donated per capita and the most money was raised for social purposes. There are also great entrepreneurs in Spain who are doing great work: such as Amancia Ortega or Juan Roig. Personally, together with the creator, Diego Ballesteros, I participate in Anchor, a group of entrepreneurs who have tried to create a network and an application for psychological support for entrepreneurs. On a psychological level, the amount of pressure you put yourself under as an entrepreneur is wild pressure, what you do has a lot of impact, but it also has an impact on your ability to manage emotions and your mind. There is very little talk about this. If you go to a psychologist, you are sick and I don't consider that to be the case. We created this group to provide support: there are 25-year-old businessmen who are already appearing in the media and under a lot of pressure and should be able to give them more support.
How would you define success?
To be happy, to be happy with what you do. I think I used to have more of the idea of checking a checklist: good health, family, etc., but the really important thing is to feel happy and at ease with what you do. As for Ontruck, Ontruck has already been a success for me. It's having a wild impact, we've created a brutal company culture and we're trying to change the world for the better.
