With $500,000 Seed Round, CitizenShipper Moves to Austin

[Updated, 5/28/15, 9:07 a.m. See belowCitizenShipper, a peer-to-peer shipping service, has taken $500,000 of seed financing, packed its bags, and moved to Austin, TX, where the company is joining Capital Factory’s incubator program, CEO and founder Richard Obousy says.

The company will use the funding to expand its services, as well as to make hires in Austin, Obousy says. He founded the business in 2009 with $60,000 from a Colorado angel investor, Eric Laughlin, after finishing a doctorate in physics at Baylor University in Waco, TX.

For the first few years, Obousy operated CitizenShipper more as a lifestyle business for passive income, before deciding consumer-driven interest in the “sharing economy” could turn it into a career. In 2013, Obousy took in another $140,000 of seed funding from angel investor Cliffe Killam, who also participated in the most recent round, and began building the online marketplace as it exists today.

CitizenShipper offers shipping of almost anything from door to door, particularly items that you might not send via FedEx or UPS, such as animals or a motorcycle. Anyone can sign up to be a delivery person, and then CitizenShipper performs background checks and address verification.

When a person posts an item to be shipped, CitizenShipper’s deliverers can make a bid to land the shipping contract. CitizenShipper adds a fee on top of the bid—a percentage that lowers as the overall cost of the shipment rises, Obousy says.

“Anyone from the guy with a scooter to a small car to a big truck can participate in the marketplace,” he says. “As we continue to grow, I want to be able to scale at an equivalent rate.”

The shipping space has plenty of competition, including in Austin, where uShip has dominated the startup scene with a similar online marketplace of its own. New entrants like San Francisco-based Shyp offer consumers affordable and easy methods of mailing goods; the company charges $5 to pick up the item you want to send, packages it, and finds the most affordable option for shipping.

CitizenShipper has a different model than other companies, including uShip, which has both consumer and commercial enterprises, and Shyp, which still uses traditional methods of shipping, Obousy says. While other companies are more similar, such as Roadie, which secured $10 million of funding in January, Obousy says CitizenShipper stands out because of its user interface and strong safety protocols. [Paragraph updated to reflect uShip’s business model.]

“It’s a huge marketplace, anyway,” he says.

Marvel Venture Partners, which has offices in Austin and New York, led the $500,000 round.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

Trending on Xconomy