First Stage Investor

TradeFox’s COVID-19 Pivot May Change Industry

TradeFox’s COVID-19 Pivot May Change Industry

COVID-19 has hit TradeFox harder than most companies in our First Stage Investor portfolio. As a trade analytics company (primarily in scrap metal and recyclables), TradeFox provides business reports on more than 110,000 companies worldwide. It was doing great before March. Then sign-ups fizzled. Potential customers were busy getting their shipping containers released from ports. Or seeing their business dry up due to plant closures. 

TradeFox could have played defense and tried to ride out the COVID-19 storm. Instead, TradeFox CEO Chris Yerbey sniffed out a COVID-specific opportunity. And now he’s running with it.  

Chris noticed recycled material traders were frustrated. Owners of recycled materials want to monetize their goods and free up storage capacity as soon as possible. Buyers of recycled materials have more time to look for deals but can no longer close deals in person. Both sides are being forced to cool their heels.

Chris has a solution — a virtual conference. It would enable buyers and sellers to meet up virtually. He wants TradeFox to become the first company to bring virtual conferences to the recycling industry. And he’s found the perfect partner (a fellow Amsterdam company housed in the same building as TradeFox, no less)! It specializes in hosting virtual conferences. Its technology could incorporate TradeFox’s data to match traders in hundreds of one-on-one meetings.

Before running with the concept, Chris wanted to make sure his idea would work. So over a two-week period he surveyed hundreds of his members – companies of all sizes and from different parts of the world – to see if they agreed. 

The response was nearly unanimous. Not a single person said it was a bad idea. They said that the world is changing. They’re not sure what the path forward is, and they don’t know when it will be safe to travel again. They were all searching for a way of doing business in a “new normal” world.

An overwhelming majority also said they don’t like wasting time at conferences speaking to people who can’t add value to their business. They wanted a more efficient method of meeting trustworthy new trading partners.

The survey results gave Chris the validation he needed to proceed. And now TradeFox has a beta version of a virtual conference — including customized one-on-one meetings. 

Chris believes virtual conferences could substantially increase revenue. They could also, he says, contribute to the company’s long-standing growth strategy of obtaining more data from more companies. That, in turn, would speed up a major pre-COVID-19 initiative of the company — partnering with a major commercial credit insurance company. 

The TradeFox team should be commended for finding an extremely interesting and potentially lucrative revenue stream in the midst of this terrible pandemic. These conferences can also double as a marketing tool and lead to hundreds of new subscribers. It’s really a no-brainer for TradeFox. 

TradeFox is still raising on Wefunder at a $7 million valuation cap. When I first recommended TradeFox to you in early 2017, its valuation cap was $4.5 million. Our members have pocketed gains of 56%. And if you want to invest more, $7 million is still a very reasonable price for a company that has figured out a plan to use the COVID-19 crisis as a springboard for growth and a spike in revenue.

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