MASON, Ohio – For ConnXus founder and CEO Rod Robinson, the numbers tell the story.
The roughly 14 million U.S. companies owned by women and minorities represent about half of all the nation’s businesses.
But those same firms account for only 6 percent of the total revenue generated by businesses in the U.S.
“That tells the tale right there,” Robinson said.
The idea is a system that helps both sides get what they need: The corporations find new, qualified vendors, and the women- and minority-owned businesses get the kind of contracts they need to grow.
It’s kind of like eBay and Match.com with a sprinkling of Amazon-style ratings thrown into the mix.
And local investors think ConnXus could one day become as well known as those other technology companies.
“I see no reason why this can’t be an extremely big business,” said former Procter & Gamble Co. chairman and CEO John Pepper, a ConnXus investor and advisory board member. “Certainly the need is huge.”
Robinson started ConnXus in late 2010 at the same time he was running Accel Advisors, a Downtown-based consulting firm he had co-founded. He didn’t have ConnXus.com completely up and running until 2012.
Company Has Big-Name Investors
Since then, the company has attracted investments from such local business titans as Pepper, Cincinnati Reds majority owner Bob Castellini and former Cincinnati Bell Chief Operating Officer Brian Ross.
Cincinnati-based CincyTech, a seed-stage investment fund that works to grow local IT and bioscience companies, first invested in the company in 2012 and also led a $1.7 million seed round that ConnXus closed earlier this year. Other investors in that round included New York-based Serious Change LP and STAR Angel Network.
ConnXus now has 15 employees and big-name customers including McDonald’s, Coca-Cola Co., Harley-Davidson Motor Company and Caesars Entertainment Corp. Locally, Cincinnati Children’s Hospital Medical Center and the Federal Home Loan Bank of Cincinnati were among the firm’s early clients.
Robinson wouldn’t give details about his company’s revenue but said ConnXus is close to making more than $1 million annually. Between 2012 and 2013, he said, revenue grew 1,200 percent.
“We’re starting from a small base,” he said. “But as one of my investors said, growth is growth.”
The key is building a group of qualified women- and minority-owned businesses that can provide the services that the company’s major corporate clients need.
Simplifying A Complex Process
ConnXus already has a database of more than 850,000 suppliers, Robinson said. About 5,000 of those have active profiles.
Columbus-based Uniglobe Travel Designers is one of them.
Company owner and President Elizabeth Blount created a profile for her company and within a month got the opportunity to bid on a travel management contract for Jack and Jill of America, Inc., she said.
Uniglobe won the three-year contract, and Blount hopes her company’s performance will help her win more business with the organization.
Without ConnXus, she said, “I would have never known how to find” the bidding opportunity.
“They simplify the process,” Blount said of ConnXus. “Sometimes requests for proposals can be pretty daunting. But with this, you’re getting to the decision-maker quickly, and it’s simple.”
That’s the goal, Robinson said.
A former procurement executive with Cincinnati Bell, Robinson knew how complicated it could be for corporations and minority and women business owners to make the connections they wanted to make in order to do business with each other.
He started ConnXus as a way to use technology to make those connections more easily.
The company offers other services, too. It can help corporations figure out how much they’re spending with women- and minority-owned firms and how much its direct suppliers spend with such firms, too. It also can manage supplier registration for big companies, which it is doing for McDonald’s, so that ConnXus keeps track of all the women- and minority-owned companies that want to do business a particular corporation.
“That’s what excites me the most about this,” Robinson said. “It’s making the market more efficient.”
Room To Grow
That strategy could have applications in other areas, too, said Mike Venerable, managing director of CincyTech.
For example, corporations could target companies that meet certain energy standards or those that are locally based or specialize in sustainability, he said.
“The spend targets that corporations have are much more aggressive, and over the next decade, I think you’ll see this area getting much more attention,” Venerable said. “We think it’s going to grow to a billion dollar category in the next decade.”
That makes it all the more important to find good women- and minority-owned businesses to add to the ConnXus database, and the company has several ways to do that.
The company announced
a partnership with the National Urban League’s Entrepreneurship Center Program in April called the Thrive Initiative. Through the initiative, ConnXus with donate 10 percent of its revenue from ConnXus Plus subscribers to the National Urban League. (Suppliers can create company profiles free on ConnXus, but they get additional benefits if they pay for ConnXus Plus.)
The Urban League operates its Entrepreneurship Center Program in 12 cities, including Cincinnati, to help minority business owners grow and become more profitable. The more thriving minority-owned businesses there are, the better for ConnXus and its corporate customers.
ConnXus also has organized a Wealth & Empowerment Summit, to be held June 16 at the National Underground Railroad Freedom Center downtown.
The summit is designed to help women and minority business owners learn more about how they can get the capital they need to grow their companies.
“The wealth summit is going to be huge,” said Daryl Hammett, the newly hired chief operating officer at ConnXus.
The event will give women and minority business owners the opportunity to hear from entrepreneurs who have grown their companies to more than $100 million in revenue a year or have built a strong enough business to sell to a larger corporation.
There also will be ConnXus suppliers there, such as Blount, who have won business through the site.
“It’s not the good old boy network,” Hammett said. “It’s actually somebody winning, and those deals are happening every day.”
ConnXus investor Brian Ross said he thinks ConnXus could someday become one of those minority-owned companies that make it big.
“I think it has the potential of even being a public company someday,” said Ross, who has known Robinson since they both worked at Cincinnati Bell. “It’s certainly too soon to declare victory, but I think Rod’s making tremendous progress.”
For more information about ConnXus, go to connxus.com .
For more stories by Lucy May, go to www.wcpo.com/may . Follow her on Twitter @LucyMayCincy.