Why I invested in SEDNA Systems

I like investing in businesses that have real moats or will quickly develop structural advantages that are unusual in early stage startups. True differentiation is rarely easy to achieve. Often the journey is idiosyncratic — by definition — even if the destination as an enduring, valuable company later becomes obvious. Sometimes businesses in this category develop unusually complete technology platforms quite early in their lifecycles. SEDNA Systems is such a business. I am thrilled to have co-led the company’s Series A round and to be working with the joyous Harry Stebbings of Stride.VC. I am grateful that Harry introduced me to the company and also co-led the round.

SEDNA is the brainchild of repeat entrepreneur Bill Dobie. Bill observed that the logistics and commodities industries experienced enormous inefficiencies because of how they use email. The “cc effect” of endless threads, opacity of siloed inboxes, and administrative burden that comes with disjointed systems was stifling the speed and productivity of teams across organizations.

As well as being a compelling human being with real depth, Bill is a product visionary. He saw that these problems were common across other high-volume global teams in other industries. He envisioned a secure system that sits completely outside of email, deduplicates messages, and in fact separates out a rich dataset of content, comments and tags, from the source delivery mechanism. This transformation is the key to SEDNA. It required building an intelligent and secure communication platform from the bottom up, outside SMTP. The ambition was startling, and the results combine authentication, certainty, speed, scalability, and flexibility that legacy communications platforms lack. This is the foundation for something truly differentiated.

So what is SEDNA to its customers? It is smart team communication software that classifies, time-stamps, and unifies messages, data, and documentation in one system. Team collaboration and actions become searchable, auditable, and aligned. Contexts for decisions made in complex business processes become scrutable. The way I see it, SEDNA becomes the system of context for its customers — right when they are experiencing greater uncertainty and scrutiny while being under pressure to be faster and more agile.

On top of the communication platform, SEDNA provides a low-code application framework so customers can easily build on top of their communication stream. The applications that interact with SEDNA messages take context not only from the message content itself, but also from the underlying data associated with the job from the transactional system.

Lastly, powerful integrations enable users to bring work done in other systems into their SEDNA workflow. As I know from being a lead investor early for Tray.io, that ability easily to build and integrate the workflow users want is really valuable, and super sticky.

And with the application framework and the integrations, the system of context gets more powerful and more embedded.

The funny thing is that, if anything, the team at SEDNA underestimates what they have built. They do not dwell on the technology at all, but focus completely on delighting their customers. And it’s working: teams using SEDNA can reduce communication volumes by 10–20x. Customer references with some of the world’s most complex, global businesses — Glencore, Bunge, Canpotex, and many others — claim time savings of up to 90 minutes each day per user. NPS is through the roof. A lot of users spend their work days in Sedna. That is a second unusual advantage — delivering incredible value to happy and expanding customers means that SEDNA merits unusually attractive pricing.

2020 has been a year of putting structure in place for future scale, and excellent (and significantly female) senior recruitment. This is just the start. The business’s future is so fascinating. I left a recent strategy session with Bill incredibly excited about the next 5–10 years. Some of my favourite opportunities:

• Downstream adoption by the trading partners of SEDNA’s many large customers
• Expansion to other high-value verticals with a similar high-value, high-volume communication flow
• Becoming the place that customers do their work, integrated with other software to execute decisions in-flow
• Intelligently capturing the context for transactions executed by other systems of record

All are part of a very big mission: to accelerate global trade as a whole and ease the work of the millions of people that work in it, by being its participants’ system of context. There is a lot to look forward to.