A green revolution in last-mile parcel delivery

Partnering with a driven entrepreneur

In 2015, entrepreneur Rafał Brzoska was seeking a partner for the innovative parcel delivery company he’d built from scratch in his Polish homeland, and quickly scaled into nine countries. At the same time, we were scouring the high-growth Polish e-commerce market for investment opportunities.

Reimagining the locker for the internet age

At the heart of the business was the founder’s absolute dedication to customer experience. New technology and new business models were added around the main proposition, the InPost APM network, with the customer at its center. Instead of trucks delivering parcels to individual homes, multiple parcels are dropped to one location. A QR code is then sent to the consumer, enabling them to retrieve the parcel at their convenience using a dedicated app on their mobile phone. As it’s an end-to-end digital solution, each stage of the process can be easily monitored, and the data used to constantly improve the customer experience and the efficiency of the system. It’s also a fully integrated proprietary model for both hardware and software: the company designs, builds, installs, and maintains the network, and uses its own proprietary software to monitor efficiency and track customer behavior.

Our market research showed that customers loved the convenience of getting their parcel at a time that worked for them. As well as being good for the customer, it was great for the environment. The InPost solution enabled hundreds of parcels to be dropped at one location, resulting in a 98% increase in carbon efficiency in last mile delivery. However, there was a problem: for it to work well, the APMs needed to be within easy walking distance of users, and, at the time, the network was spread too thinly.

Returning to InPost’s roots

As our due diligence intensified, it became obvious that if the company was to move forward, it first had to go back to basics. In the preceding years, rapid expansion into new markets had taken a toll on the company’s finances. Working alongside Brzoska, we developed a plan to refocus on the three markets where it was strongest: Italy, Poland, and the UK.

The scale of our proposed transformation could be best achieved by returning it to private hands. At the time, the group comprised two separately listed entities, Integer and InPost, which added significant complexity from the start.

“A highlight of our partnership was how smoothly InPost was able to streamline its operations and return the company to financial health with Advent’s support. Rafał and the management team relied on Advent’s expertise across the e-commerce supply chain, and leveraged Advent’s global reach effectively,” shared Peter Nachtnebel, a Director at Advent

Once we had taken the business private and built new governance structures, we conducted consumer research that showed users were only prepared to walk about seven minutes to reach an APM. Armed with this insight, we invested heavily to create a network that prioritized customer convenience – placing lockers at busy transport hubs and areas of high commuter footfall.

Another key part of the plan was to provide Brzoska with the leadership support he needed to achieve our collective goals. Working alongside Advent’s Portfolio Support Group, an enhanced management team set about driving operational change, including a lean production initiative, followed by a systematic pricing review to optimize the company’s unique market position. We also invested in growing and enhancing the skill set of the sales team.

Unlocking further growth during the
Covid-19 pandemic

When Covid-19 hit, Brzoska and the team quickly turned the crisis into an opportunity by launching an advertising campaign that extolled the safety virtues of InPost’s system. As bricks-and-mortar retail shut down during the lockdowns, e-commerce rapidly accelerated, putting further pressure on delivery logistics. InPost leveraged its extensive dataset and advanced analytics capabilities to enhance its logistics network and partnered with retailers to offer a ready-made solution to help get goods to consumers quickly and safely.

InPost’s lockers could be opened with a QR code on a mobile phone and closed with a flick of the elbow, therefore they removed the need for human interaction in the parcel delivery and pickup process. Retailers and consumers alike embraced the new service during the pandemic.

Collectively transforming the logistics sub-sector

The growth of the business under our partnership with Brzoska validated our initial conviction in InPost’s potential. “There was a strong logic for a partnership from the outset as we developed a joint vision for the company. Brzoska struck us as an exceptional entrepreneur who needed an experienced backer to streamline his business and return it to financial health. He viewed Advent as a collaborative partner with deep roots in the region, expertise across the e-commerce supply chain, and a global growth platform,” shared James Smith, a Director at Advent.

When we acquired the company in 2017, it was financially stressed and generating c. €10m in EBITDA, but in 2020 it delivered >€215m in Adj. EBITDA. On the back of this growth, we listed the company on Euronext Amsterdam in January 2021, retaining a material stake and two Board seats. The company has continued its impressive growth trajectory under public ownership, with parcel volumes tripling between 2020 and 2023.

For Brzoska, this growth has not meant relinquishing the driving seat. “Advent trusted me to make the right calls,” he says. “Some funds stifle their management, but Advent gave me the tools and let me get on with the job of executing the plan.”

On the Advent side, by partnering with an exceptional CEO and founder, we were able to unlock growth. We have also deepened our knowledge and understanding of the wider logistics sub-sector, ultimately working with other logistics businesses, such as Evri, and augmenting our existing strengths in payments and e-commerce.