When it was built in 2016, Dispatch was designed for just one customer. Andrew Leone co-owned a company that distributed HVAC parts, offering coveted job-site delivery. But Leone found that owning a fleet of delivery trucks and employing full-time drivers wasn’t practical and relying on traditional courier services wasn’t reliable.
So, he and Ryan Hanson conceived of an app that would allow Leone’s customers to order parts and watch as a contracted driver took the job and delivered the part with the kind of real-time transparency of Uber or Lyft.
No longer wondering where their parts were or when they would arrive, customers turned around and told other distributors they should be using this new service.
Dispatch went viral, Leone said. “It was really clear that we need to shoot for the moon with this.”
Dispatch started in the Twin Cities in early 2017 and grew to markets in Dallas/Ft. Worth, Kansas City, Cincinnati, and Orlando in its first year. It will launch imminently in Chicago. Founders Leone and Hanson are raising money to bring Dispatch to 20 or more new markets.
They’ve already reached a milestone, raising $2.6 million from local and national investors, including $1 million from customers who wanted to help bring the company to their city. They also received backing from venture capital funds Gopher Angels, Great North Labs, and Revolution’s Rise of the Rest.
Rise of the Rest, founded by Steve Case and Hillbilly Elegy author J.D. Vance to invest in companies in places other than New York, San Francisco and Boston, recently added a partner in Minneapolis. Mary Grove – founder of Google for Entrepreneurs – is based here to support investments, like Dispatch, and expand the Rise of the Rest portfolio.
Beyond the obvious benefit of receiving funding and guidance from investors with expertise in scaling a business, having backers like Rise of the Rest brings a new level of confidence as they enter their Series A, Leone said.
“Having that name behind it adds an instant level of validation,” he said. “It’s like, ‘Okay, those guys aren’t idiots.’”
Dispatch operates most often about one level above consumer visibility. Their drivers may deliver the brake pads a mechanic is waiting to install or transfer packages from one UPS store to another. They keep vehicles of varying sizes, from cars to cargo vans, to make an average of 5,000 trips per month.
What Amazon did for consumers, Dispatch does for business, Hanson said. They receive calls from business owners in other cities, wondering when Dispatch will expand to their area.
“We chose markets to go to where we had paying customers already,” Hanson said. Those customers were like Leone’s HVAC company, choosing between maintaining their own delivery fleet or outsourcing to a local courier. Instead, many have taken the funds they budget for those options to invest in Dispatch.
Dispatch added 120 customers in the last 60 days, nearly all of whom will come back again and again, the founders said.
“Once they get to four orders, they stay forever,” Hanson said, adding, “Forever’s only been a year.”
