Everyone has one thing that they are enthusiasts of. Whether it is BMWs, photography, or even flashlights, something about it just grabs you in. Newsflash! You aren’t alone and there are plenty of people just like you who have the same interests. It is these people who you should be buying and selling from. Panjo lets you do just this. Their community-based platform allows people with similar interests to buy and sell with each other not just as a vendor to seller, but as one enthusiast to another.
Coming off a recent round of funding, CEO Chad Billmyer tells LATechWatch about his own interests as well as what prompted him to create it.
Who were your investors and how much did you raise?
Spark Capital led Panjo’s 4.6M Series A joined by The New York Times Company, Fabrice Grinda, Lerer Ventures, BDMI, BEENOS Partners, Mucker Capital, Basset Investment Group, and Mesa to help the company expand.
Tell us about your product or service.
Panjo is a community-based marketplace. Individuals who belong to communities ranging from Audi enthusiasts to avid campers to RC hobbyists use Panjo to launch marketplaces for their communities. Community members then buy and sell rare and hard-to-find items to fellow members of their communities.
What inspired you to start the company?
I am a hybrid and electric car enthusiast. After poor experiences buying and selling parts and modifications for my hybrid car, I thought there had to be a better, more secure way for members of a community to buy and sell among one another. Finding none, I set out to build Panjo.
How is it different?
Unlike alternative methods of buying and selling within a community, Panjo provides buyers and sellers with a number of benefits. Among other things, benefits include identity verification, payment processing, discovery tools, dispute resolution services, reputation tools, and price negotiation features. Inspiration, discovery, and subject matter expertise are big drivers of a successful marketplace that caters to an enthusiast community. These core drivers are highly lacking in marketplace and classifieds alternatives.
What market you are targeting and how big is it?
Panjo’s initial focus is the $15 billion in products, parts, and accessories that buyers and sellers swap among one another in enthusiast verticals including automotive, sports, and hobbies.
What’s your business model?
Sellers pay Panjo a transaction fee when their item successfully sells.
What was the funding process like?
Raising institutional financing for Panjo in a seed round and this Series A round was a fantastic opportunity to gain insights from individuals who look at hundreds of businesses. Investors’ questions, feedback, and articulated and unarticulated concerns helped provide us with an added degree of focus and insight on the business.
What are the biggest challenges that you faced while raising capital?
Raising capital takes time away from running the business. One challenge is losing a few weeks of all the contributions you make in the business while investing resources into speaking with prospective investors and finding those investors who share your vision and who can provide the greatest support beyond operating capital. Rare is the company that doesn’t have some aspect that gives investors pause. In Panjo’s case, we were operating a network of plugins that was generating nearly all our traffic. That fact was a concern for a number of investors. With this funding we were able to address that concern and strengthen the company’s long-term prospects.
What factors about your business led your investors to write the check?
Marketplaces make appealing investments. First, due to network effects, they get stronger as they grow bigger. The gross merchandise volume of sales increased 600% since the last round of financing. Second, Panjo has great repeat usage by buyers and sellers. Third, Panjo is addressing a real and growing problem, transactional costs, for community members and community organizers. Fourth, Panjo has unique supply and is addressing an underserved market. These were among the Panjo attributes that excited our investors.
What are the milestones you plan to achieve in the next six months?
Our next six months are highly focused on continuing to reduce transaction costs for buyers and sellers. In a transaction, there are all kinds of costs: time, money, opportunity costs, and risk to name a few. Through features and services Panjo strives to make every step of a transaction run smoothly, keeping the buyer and seller out of the dark, and maximize protections for both parties in the transaction.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Finance your company through your customers. Seek capital in the case that your growth is thwarted by your inability to keep up with demand. Don’t jump to the assumption that your problem is that you don’t have a fresh injection of capital in the bank. Ask yourself if your core problem is that you don’t have product-market fit. Is the core issue that you don’t have paying customers? Solve that before seeking capital.
Where do you see the company going now over the near term?
The more successful we are, the sooner you will make a habit of checking Panjo regularly to be inspired and discover items that fall into a subject area you are passionate about like cars, sports, or a hobby. The more successful we are, the sooner you will use Panjo to sell a great item to a likeminded enthusiast who will appreciate your item and give it a great new home.
What’s your favorite LA bar, when you need to kick back and relax?
Does 28 minutes with an episode of Master of None on Netflix count as an LA bar?