What's New in Business: ConnXus gains traction at linking clients with diverse suppliers
Revenues double in 2015, more hiring planned
Kevin Eigelbach, WCPO contributor
6:01 AM, Feb 5, 2016
MASON, Ohio -- ConnXus, which helps companies find qualified, diverse suppliers and keep track of their spending with those suppliers, is ready to scale up.
“We have companies that are demanding our product,” said founder, president and chief executive Rod Robinson. “We want to get in front of them and help them.”
After five years in business, the Mason-based company has started to gain traction, doubling its revenue last year to well more than $1 million but less than $10 million (Robinson would not reveal the exact amount). It now has 21 employees, including Robinson, and plans to add more sales and development staff this year.
What does it do?
The most basic service involves taking a customer’s accounts payable or spending records and matching them against the company’s database of 1.7 million diverse suppliers to validate the customer’s spending on diverse suppliers. Different companies have different goals for diversity spending, Robinson said, but it generally means money spent with women-, minority- or veteran-owned businesses, or with small businesses generally.
More advanced services include enabling customers to track their secondary diversity spending — money spent on contractors who then hire diverse subcontractors — and enabling them to search the ConnXus database to find diverse suppliers.
How did it get started?
Florida native Robinson, now 48, moved to Cincinnati in 2002 when he became chief procurement officer for Cincinnati Bell. In that role, he learned firsthand how hard it is for large companies to find diverse suppliers and keep track of money that goes to them.
In 2005, he started his own consulting firm and spent many hours going over accounts-payable data line by line to find diverse suppliers. That reinforced his conviction that a software solution was needed, and he started ConnXus in 2010 to provide it.
Who are the investors?
They include local startup investor CincyTech; Boulder, Colorado-based TechStars, which invests in tech startups; and New York-based Serious Change LP, which invests in high-growth, high-potential minority-owned companies. Management hopes to raise $3 million to $5 million more this year from venture-capital firms, Robinson said.
He added that he and the other employees have also invested a significant amount of their own money with the company through an employee stock option plan. Altogether, the company has raised about $4.7 million, and, while it’s not yet turning a profit, Robinson said, it’s getting close.
Who are the customers?
They include large organizations such as Louisville-based distilled spirits maker Brown-Forman Inc., the National Basketball Association, American Express, Harley-Davidson USA and local clients that include Cincinnati Children’s Hospital Medical Center.
Who else is on the team?
Daryl Hammett was consulting as a business coach when he met Robinson and became the chief operating officer of ConnXus two years ago. He’s a former vice president and general manager of Sears Optical and an executive for 15 years with Luxottica Group in Mason, a maker of eyewear. He replaced 90 percent of the existing team, he said, and took the company from a scrappy startup to more of a global business.
“We have built the most user-friendly platform in the marketplace,” he said. “At the end of the day, we are taking supplier diversity to the next level, which is supplier inclusion.”
That means not just hiring diverse suppliers, he said, but also listening to their ideas and seeing how they can add value to the hiring company’s strategic plan.
What has the journey been like?
The highs are really high and the lows are really low, Robinson said, but he wouldn’t trade owning this business for anything else. “I wake up every morning excited about what lies ahead,” he said.
In the early days, the challenge was attracting capital and getting clients to take a chance on a startup, he said. Now, the company has both capital and good talent.
“For a long time the wind was in our face,” he said. “Now, the wind is at our back.”
What: Helps small businesses and woman-, minority- and veteran-owned businesses grow by connecting them to Fortune 2000 corporate buyers.