Accuship Receives Venture Funding from Delta Capital MAnagement

Germantown based Accuship, Inc. received a breath of new life last week from local VC Delta Capital Management, LLC.  Delta Capital Management invested $2.8 million into the online logistics company that had released more than 22% of its work force earlier this year and had parted ways with its president.

The $2.8 million is considerably less than the $10 million that the once IPO ready Accuship was seeking in April 2000, but this round of funding will boost Accuship from a two-year span of profit drought.  The latest round will help Accuship, founded in 1994, to attack the European and Asian market.

The decision for a new round for funding came as market condition changed.

"Basically, there are so many market opportunities right now; domestic and international.  The time was right for new funding," said Mason Kauffman, CEO.

The $2.8 million is the first outside round that Accuship has received since an $8 million round in 2001.  Kauffman has invested some of his own money in 2001 after the capital markets grounded to a halt.  He has also invested his own money as part of this round with Delta Capital.  Accuship decided they didn't want to take too much money because they didn't want to sell too much of the company.

"We were getting VC offers in the ten's of millions range," says Kauffman.  "It's kind of like, if you know that next year you're going to be worth 10 times what you are now, you don't want to sell at a lower valuation.  Just take what you need.  You don't need a whole pile of money."

Accuship's next step is to build a relationship with European and Asian carriers and attract more global shipping companies, such as Nike, Barnes & Noble and Nordstrom.  All of which has joined Accuship's client list.

"We are trying to expand internationally as well as enhance out domestic, Web-based elogics technologies," said Kauffman.  "Curently we work with 1,000 carriers and these are that many more internationally."

Kauffman says Accuship's debt position looks good and they are all bank loans that can be paid through revenue.  
"We have standard bank loans with no plans to use and monies for early retirement of debt."

Accuship's ability to get new money is a welcome sign to an industry that has been plagued with the recent bankruptcies of Computex Logistics and Strategic Technologies.  These bankruptcies made the investors weary of the online logistics market.

"It is strong that companies in this market have strong financial data because companies are going to insist on seeing externally audited financial statements," says Dave Nelson, president of AIMS Logistics.

A vast majority of the industry is dominated by privately held companies such as Accuship that are expected to undergo a period of consolidation.  

Don Mundie, managing partner of Delta Capital, says he's confident that Accuship will survive consolidation and will be in a position as a candidate for an IPO.

"The public markets are so damaged right now," Mundie says.  "But currently this is a company that if and when these markets return, would be good public market candidate."

Accuship caught Mundie's eye during a "planned loss year" in 2000 where Accuship began to purchase IT and hired new staff.

"They were profitable early on," Mundie says. "When they decided to beef up their product that required a lot of development and infrastructure.  If you want to invest to attack a market that's growing, you have to add people and IT."

In 2001, despite 93% year-to-year revenue growth, Accuship's revenue dropped to $4million short of its April projections and $3 million short of its revised August projections.  The blame was placed largely on the recession and on September 11th.

Kauffman is confident that Accuship will reach the $9million mark this year and will eventually be a good candidate to go public.


Contact:
Mason Kauffman
Accuship
901-271-1936
mkauffman@accuship.com

Don Mundie
Delta Capital Management LLC
901-755-0949
yearwood@deltacapital.com