The Dutch government’s Corona bridging loan has become the lifeline of the market leader in same-day delivery
The Corona Bridging Loan (Corona Overbruggingslening, or COL) has been able to breathe life into Dutch businesses in a number of ways in recent months. Or even saved them from ruin. Earlier we wrote how Mentech got the validation new technology thanks to this loan. For SiteLucent saves time: “a bridge to better times”. And Ioniqa avoided a serious cash flow problem with her.
It was the same with the company Arnhem Red i Pakketje (‘Register your package‘). The company, which had already become a big name in the logistics world in just a few years, suddenly gained momentum during the corona crisis. But it caused major problems, says Sam Rohn, CEO and co-founder of Red je Pakketje. “We are the market leader in the Netherlands for same day delivery with a share of 60%. We do this with eight hundred employees for companies like Amazon, bol.com, Greetz, IKEA and five hundred other online stores.
Growth during the crown was not only self-sustaining. There were also additional projects. Rohn: “In March the flower culture collapsed, the flowers were destroyed en masse. We have several florists as clients and they were looking for an alternative online sales channel. At the same time, 120,000 people in retirement homes have not been allowed to receive visitors. Flowers for these people would of course be very nice, we thought. I put this thought on Facebook and after that it went really fast. Within 24 hours there was an online store and over the next four weeks we sold 54,000 bouquets. People ordered a bouquet for 15 euros and it was composed by producers and given to elderly people alone in retirement homes. We did it at cost. It was good for name recognition and also for very rewarding work. This project was temporary. Now that the florists have reopened, of course we will not be competing with our customers. “
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Cash flow problem
But at the same time, Red je Pakketje slowly stumbled upon a serious challenge. A growth problem. “When the Netherlands shut down, people started ordering a lot more online. From mid-March, we registered a growth of 169% in a short period of time. We had to invest. In April, we hired 180 more people, added 60 cars to the road and moved into a larger building. And then we had a cash flow problem.
“In April, we hired 180 more people, added 60 cars on the road and moved into a larger building. And then we had a cash flow problem.
Couldn’t growth have slowed down a bit? “Of course, we could also say no to potential customers, and sometimes we did, but we always looked for solutions. Our entrepreneurial heart forced us to do it, but above all, other entrepreneurs also badly needed us during this difficult period.
Raising additional funds, which the company has done on several occasions in recent years, was now suddenly difficult as investors were also putting the brakes on. “As a result, we quickly ran out of cash in a very short period of time. The survival of the company was seriously threatened ”. Rohn sought to get in touch with Oost NL – one of the regional investment companies that handled the implementation of the LOC – for advice. “They really took us by the hand. We had all of our documents ready and once the LOC was there we could send everything right away. Three weeks later, Oost NL assigned the LOC to Red je Pakketje. “We couldn’t have raised this any other way and it could have been the end for our business, despite the fact that we were growing. It was our lifeline.