Social enterprise doesn’t always have great access to global supply chains, but there’s one Perth startup that’s about to change all that.
It’s called Cruxcee, a web-based procurement platform that facilitates an efficient procurement process whilst simultaneously giving buyers access to an end-to-end supplier network of social enterprises. Whilst remaining competitive on quality and price, it offers something other providers don’t: the ability to maintain an ethically, socially and environmentally responsible supply chain.
“I used to work at an engineering firm and I would watch every day as the procurement team used an online system to facilitate transactions and contracts worth tens of millions of dollars” explains Jordan Holzmann, local Perth entrepreneur and founder of Cruxcee, “I realised that if there was a way to redirect some of these contracts and funds towards social enterprise, it would make a massive difference to these businesses and to the community – not through grants or donations but by creating actual revenue streams in exchange for goods and services”.
Over the last three months, Cruxcee has engaged in crucial beta testing with over 50 Australian suppliers. Although this has resulted in strong interest from potential corporate buyers, building a digital social enterprise in WA is not without its challenges. Whilst the resources boom has turned the historically pastoral economy into a global player, the local market is still relatively conservative.
“Cruxcee is without a doubt a disruptive tech company and at the moment Perth investors view this type of business model as high risk” says Holzmann. “They need to see that due to scalability, digital technology like Cruxcee has the potential to reap very strong returns” he said.
Technology-averse investors unfortunately aren’t the only barriers to entry for social enterprise. Many consumers view social enterprises as small ethical businesses working at a grassroots level, without any real scale, corporate rigeur or competitive pricing. Cruxcee challenges this notion. Its suppliers may be social enterprises, but they are still competitive, highly rated and have all the appropriate requirements checked off.
“This is what the big corporates, and government departments are looking for. Buyers may have some interest in social procurement but at the end of the day it comes down to cost and efficiency” notes Holzmann. “There is a perception that the only way to engage with social businesses is through donation or charity; this is absolutely wrong. You are still procuring the same products, only now your procurement spend results in positive community impact, giving you an additional non-financial return on investment”. This non-financial ROI often takes the form of a reduced carbon footprint; increased employee engagement through values alignment; or stronger brand engagement from consumers demanding higher social utility from preferred brands (to name a few).
So what’s next for this young entrepreneur and his supply-chain juggernaut? With a minimum viable product set for release in the coming months, Holzmann is seeking investment, and building a strong team in place to accelerate growth by the start of 2016.
Holzmann is excited about expansion in the WA market, followed by organic national and international growth. “The world is changing for the better and the next generation demands that companies and governments are socially and environmentally aware. We understand this, and are looking forward to facilitating that change”.