January 25, 2024
ChemCloud is a Paloma portfolio company helping manufacturers streamline their procurement of raw materials. They kicked off back in 2021 and since then they’ve completed a successful capital raise, grown to a team of 5 and have millions of dollars worth of transactions taking place through their platform every quarter.
We sat down with the co-founders, David Wright and Hector Williamson, to hear how they’ve gone about building ChemCloud.
1. So tell us, what does ChemCloud do?
Dave: ChemCloud is a digital platform that makes it easy for companies to discover, buy and sell chemical raw materials. The chemical industry is a remarkable industry- it supplies inputs into nearly every single manufactured product around the globe and is a $5.5T industry worldwide. But for such an innovative industry, the way chemicals are bought and sold has remained unchanged for decades- stuck in a world of paper, phone and fax. This means time is soaked up doing repetitive, low value-add tasks, rather than optimising procurement or looking for new raw materials.
We want to allow chemical businesses to focus less on the admin of procurement and sales, and more on the innovative technology that is going to improve their businesses, and in the long run, play a part in reducing the carbon footprint of many manufactured products.
2. How did you meet each other?
Dave: I felt the problems of the industry first hand because I managed my family’s chemical manufacturing business for six years. I’ve known Hector for over 20 years and we’ve previously worked together when we both joined a law firm straight out of uni.
Hector: When Dave explained the problems around procurement that exist in the chemicals industry, I was really intrigued, and thought there was a huge opportunity to use digital tools to streamline the flow of information between suppliers and manufacturers. The more time I’ve spent in the industry, the more I’ve learnt how critical it is to everyday life - and how much innovation in this industry is crucial.
3. How did you begin to tackle a problem in such a big industry?
Hector: Initially the problem we started with was a relatively small but urgent one: suppliers having excess stock of raw materials. We thought an online marketplace was the best way to solve that and from there we have developed the platform to handle a more typical procurement workflow - where the manufacturer knows what material they need, but don’t know which supplier has stock available at the right lead time and price point.
We started working with the venture studio, Paloma, to help us build the first version of the product. This allowed us to get up and running really quickly and get some early traction. We were able to get moving much more quickly than we otherwise would have… instead of spending 6-12 months hiring, we were able to spin up a dev team within 2-3 weeks. We were also able to get quick access to expertise from subject matter experts within Paloma.
4. What does the business look like now?
David: We’re now an in-house team of 5. We’ve got an incredible CTO, Head of Business Development, and a Lead Software Engineer. We’re processing millions of dollars of transactions through our platform and launching new features, such as Instant Quotes, Dynamic Payment Terms, and soon ChemCloud Connect, in response to customer demand.
Hector: We actually hired our Lead Software Engineer from Paloma - he had been working on the platform for 18 months, was an integral part of the team and it was a great way to quickly add to our own team. We were also able to hire our CTO through Paloma’s network.
5. Why do you think you have the right to win?
David: I felt the pain of the current ways of working when I managed our family business and so we understand the problem, and its implications, really well. I also have a real passion for the industry. Chemical innovation is essential, but is being slowed down by the way suppliers and manufacturers transact. Speeding up this innovation is something I really care about.
Hector: We’ve also had a real focus on working with customers to process transactions right from day 1 - even when the only product we had was an online form. It means that we’ve been able to build and iterate the product with active customers using the platform every day.
6. What advice would you have for first time founders?
Hector: Just build the first version - whether it’s an online form, a low-code app (e.g. bubble) or something in airtable - build the first version, show it to customers and iterate from there.
Dave: Solve a problem you’ve experienced. It means you can have unique insight and empathy into the problems faced by customers, and you have a network of potential customers that you already know.
7. What’s next for ChemCloud?
Dave: In a relatively short amount of time we’ve managed to help some of Australia’s largest manufacturers, from automative to personal care manufacturers, to digitise how they purchase their raw materials. They love interacting with the platform - and by saving time and money, have been able to grow their own business.
We’re excited to further enhance our digital platform and accelerate the positive impact of the chemicals industry!
To find out more about ChemCloud, visit chemcloud.com.au