![Gozova chief operating officer Gabe Deale and CEO Goren Krndija Gozova chief operating officer Gabe Deale and CEO Goren Krndija](https://fortworthinc.com/downloads/291/download/IMG-7028.jpg?cb=7a56a450434cf8b8771fe0e502b1e075&w={width}&h={height})
Courtesy: Gozova
Gozova chief operating officer Gabe Deale and CEO Goren Krndija
Gozova chief operating officer Gabe Deale and CEO Goren Krndija
Gozova - an early-growth, on-demand Fort Worth transportation technology company that pairs trucks and drivers with consumers and businesses that need items picked up and delivered – completed a $500,000 seed round with commitments from Fort Worth investors Sasha and Ed Bass, Fort Worth investor Bobby Patton, and two other angels, Gozova executives said in an interview Thursday.
The Fine Line Group, the Family Office of Sasha and Ed Bass, is lead investor in the round, Gozova CEO Goran Krndija and Gabe Deale, Gozova’s chief operating officer, said in the interview. Fine Line is known best for its development of Sundance Square in downtown Fort Worth; Sasha and Ed Bass last fall took 100% ownership interest in Sundance Square. Patton has investments in oil and gas properties, real estate, ranching, and insurance, and partial ownership in the Los Angeles Dodgers Major League Baseball team.
Tyler Godoff, the Fine Line vice president who the office hired nearly a year and a half ago to direct a new venture capital fund, confirmed the Gozova investment in an interview Friday. Patton, who invests through his TCRG, Inc., has a nascent interest in venture capital. John Langston, chief investment officer for TCRG, confirmed the Gozova investment in an interview Thursday afternoon.
Both Fine Line and TCRG said they wanted to help encourage interest in VC investing from other local family offices in Fort Worth, where there's a dearth of such financing available to startups and small businesses with high growth potential.
The Fort Worth Chamber of Commerce and city, in their economic development plans, have said they want to encourage the city's wealthy families to look for investment prospects in local growth companies. Godoff cited PitchBook data from 2018, which showed $11.3 million in VC invested in four Fort Worth deals, compared to $306.7 million in 43 Dallas VC deals, $2.68 billion in Boston, $7.8 billion in San Francisco, and $8.25 billion in New York.
"I think it's a great model for family offices to not just be philanthropic locally, but to invest locally," Godoff said.
Oil and gas has been a "familiar investment space" in Fort Worth, Godoff said. But otherwise, "writing a $200,000-$250,000 check to a company that’s just getting started is not the norm.”
Gozova is the second VC deal that Fine Line has announced. The first was FoodMaven, a Colorado company that sells high-quality local, oversupplied and imperfect food from distributors, manufacturers and producers to restaurants and institutional kitchens at significant discounts.
FoodMaven, with the Fine Line investment, chose Dallas-Fort Worth as its first expansion market outside of Colorado. Fine Line helped it connect to local market knowledge, Godoff said. "There's value that a family office can provide."
Fine Line committed to the Gozova investment while communicating simultaneously to Langston in Patton's office to encourage Patton to come in on the deal, Godoff said in the interview.
“We believe it is important that we are not the only capital in the deal," Godoff said. "It is crucial we recruit additional investors join us in our efforts to support companies like Gozova.”
The financing, debt convertible to equity, will help the three-year-old, privately held company as it grows in its home North Texas market and expands into others, Krndija and Deale said.
Later next winter, the company plans to launch a round of Series A financing, a priced round, Krndija and Deale said. That round of stock will convert existing investments into equity and establish a fair market value for the company, they said. Gozova today is owned by Krndija, Deale, and three other executive officers, Krndija and Deale said.
“It’s hard to predict how much we’ll need to raise in the (Series A) round, as that decision involves a number of current unknowns,” Deale said. “It will become clearer this fall.”
Krndija and partners started the business in 2017 with a mobile app that consumers could use to call up a pickup and driver if they needed an item moved from one place to another.
The business did $17,000 in revenue in 2017 and $70,000 in 2018. Last year, thanks to partnerships with groups like the popular Tanglewood Moms and TCU, revenue grew again, Krndija and Deale said. They declined to say what sales were, citing competition. “We’re not just a delivery company” any longer, he told Fort Worth Inc. in an interview a year ago. “We’re a logistics company.”
More growth is coming. Late last year, the company, which had struck partnerships with retailers to move purchased goods to consumers’ homes, expanded into business-to-business. In the last year, it added the Austin and Waco markets. In early May, it plans to add Houston. “San Antonio is next,” Deale said. “We want to hit all the major Texas markets first.”
In addition to the seed financing it’s raising, Gozova was accepted last week into the Capital Factory's Accelerator, giving it an additional venue through which to seek talent and funding, Krndija and Deale said. Capital Factory is based in Austin, and in 2018, it opened its DFW location. According to PitchBook, Capital Factory has been the most active venture investor in Texas since 2013.
Deale, who graduated TCU in 2000, has spent 20 years in technology, including cybersecurity and high-speed networking. After a successful exit from one firm, he looked toward Fort Worth for an entrepreneurial venture. “It’s a city with tremendous resources.”
A Fine Line executive introduced Deale to Krndija, who had begun to search for outside funding, Deale and Krndija said.
The company moved into B2B after executives from oil and gas firms said they were having trouble moving parts to the oilfield from their headquarters or suppliers.
“What they were doing is calling a bunch of courier services and negotiating price,” Deale said. Gozova’s chief technology officer developed a console within two months for commercial users, allowing them to enter a small number of inputs such as pickup and dropoff location, kind of item and weight.
“We collect the necessary information from clients, and we arrive with the right vehicle and ample time to make the delivery window,” Deale said. “Our customers no longer have to waste a bunch of time making 20 calls to have their loads scheduled, tracked and delivered.”
Currently, Gozova staff review customers’ requests before pairing them with trucks and drivers and quoting pricing, but automation within the app is coming, Krndija and Deale said.
“Sophisticated algorithms are used for consumer and commercial services,” Deale said. “We’ve not yet cut over to algorithm-based automation yet, but we’re getting very close.”
On the commercial side, Gozova also has talked to companies in distribution, construction, and hospitals, and found what Krndija and Deale describe as a sizeable market for pickup and delivery of items such as excess materials, construction supplies, and parts.
“We saw a huge potential opportunity with commercial services, developed the necessary technology and pivoted,” Krndija said.
On the consumer side of the business, Gozova plans to modify its app to allow customers to request and schedule apartment, household and vehicle moves. “We haven’t released this functionality in the mobile app, but we’re already fulfilling these requests for call-in customers,” Deale said.
This year’s growth goals include expanding the number of user-installed apps to 10,000 from today’s 5,000; generating $15,000 per month by 10 commercial clients by summer’s end (“We’re well on our way to achieving that,” Deale said); and having 100,000 installed apps by Christmas.
Gozova estimates five to 10% of users who have installed the app use the service at least once per month. The first has a network of 1,000 drivers who have signed up, but uses a small pool of about 20 drivers who essentially work fulltime.
Gozova executives believe there’s sufficient room to expand their model beyond Texas. “We’re executing what will eventually become a national model within Texas first but believe it has the potential to expand nationally,” Deale said.
“This business is going to exist," Godoff said. "The question is who will execute it well enough to make it sustainable.” Texas is an ideal ground for the construction of the business, because of its large numbers of trucks and drivers and spread-out population. "This model will be built in Texas."