Luminous Raises $2.1 million
Luminous is a B2B e-PaaS company based in Sandy, Utah that has created a state-of-the art supply chain management platform particularly well-suited to small and medium-sized e-commerce companies, say its founders.
The company just received a follow-on investment from its original funding partner, Provo-based Startup Ignition Ventures (SIV), quadrupling the original investment of $150,000. Luminous was SIV’s first investment in November 2021. SIV brought the deal to Pelion Venture Partners (Cottonwood Heights, Utah) which co-invested with SIV in the first round by adding $250,000. Serena Ventures (San Francisco), the venture firm founded and run by tennis champion Serena Williams, participated in that initial round.
Luminous has closed a follow-on round in which Serena Ventures doubled down on the company and Startup Ignition Venture quadrupled down. Total investment to date is $2.1 million.
The company was founded by Jared Ward, an e-commerce expert with deep experience in supply chain management and e-commerce operations. Most recently was his experience at Qualtry, a Vineyard, Utah-based e-commerce company where he started and implemented the initial minimum viable product. He developed the first iterations of Luminous for that company with the understanding he would right the ship and move on to head up the software venture.
Startup Ignition Ventures suggested that Ward upgrade Luminous’ technical talent by bringing on a full-time tech co-founder and CTO. John and Tyler Richards recommended Brendon Beebe for the position in January 2022. Beebe was coming off foreUP’s successful 11-year run and smashing exit. The Richardses also connected Beebe to the founders of foreUP.
“Brendon is one of the top startup CTOs in the state,” said John Richards, managing partner of Startup Ignition Ventures (SIV). “One of our specialties and hallmarks is helping pre-seed companies find a tech co-founder. It’s essential to our investment thesis. We save talent in our network like Brendon for the best of the best. That says a lot about Jared and Luminous.”
In fact, Beebe was discovered by the Richardses when he was a student at BYU being threatened with expulsion for having created a software to manipulate the class waitlist at BYU. John Richards, then a BYU professor of entrepreneurship, interceded to commend Beebe for his entrepreneurial instincts and then hired him to finish a woefully late and over-budget software project. Beebe completed it in 3 weeks by himself. He then went on to join another Richards investment, Tute Genomics, and then foreUP.
TechBuzz sat down with Luminous’ founders, Jared Ward and Brendon Beebe, to find out more about the company’s story, product and traction.
In February 2021, the company launched an MVP and started by bringing on five clients. Scaling up to a decent ARR number and having implemented product feedback into the Luminous platform, the founders had the confidence to start initial fundraising conversations by the end of 2021.
“We met with dozens of VCs and angel investors. We wanted to nail down a few strategic pillars for everything we were looking for in a funding partner,” says Ward. “One of those pillars was to find a strong, Utah-based investor that could not just provide the investment, but also give us invaluable advice on how to spread within Utah, the market we are first focused on.”
“So that’s when we met with John and Tyler Richards of Startup Ignition Ventures. They have been super pivotal,” says Ward. “John and Tyler wrote their first check in November 2021. They were instrumental in bringing on Brendon Beebe and coaching us in those early days as we were taking the product to market. Then they did a follow-on investment last November and really doubled down on us. They've been very crucial to our success and our growth so far.”
“John’s mentorship has been incredibly helpful,” says Beebe. “He’s been in the startup field for so long that he essentially has an algorithm for success that when followed the company will be successful. Having his constant mentorship, I find to be more valuable than the money he’s invested,” concludes Beebe.
The Luminous founders have modeled their building philosophy after a tool familiar to many–HubSpot–the popular CRM that allows users to pay only for the modules they want to use and not be charged for other components that they don’t want to use. “As HubSpot is to Salesforce, Luminous is to NetSuite,” says Jared Ward, CEO of Luminous.
“Hubspot has a whole suite of tools and solutions in their CRM that are easy to use, and you're only paying for the modules that you're using. We take the same approach. We give users a whole suite of tools and they pay only for what they actually use. And we have people assisting in the implementation process all the way,” explains Ward.
The luminous founders are motivated to address a problem they have repeatedly witnessed in the tech sector–the unnecessary jump to overly complex software platforms that are overbuilt and in many ways ill-suited to the needs of most small and medium-sized businesses.
“We have noticed a tendency among small and medium-sized ecommerce businesses, especially here in Utah, to believe the next logical step from using a tool like ShipStation, or a Google Sheet or an Excel spreadsheet, is to move to a massive ERP system such as NetSuite.” says Brendon Beebe, CTO of Luminous.
He continues:
“The classic ecommerce company that we run into is on ShipStation, or maybe they’re using multiple ShipStation accounts,“ says Ward. “They may be using Google Sheets combined with an inventory system like SkuVault, but they all have the same pain points: ‘My systems don't talk to each other. My inventory isn't accurate. I can't get a forecast.’ We're solving those problems for small and medium-sized e-commerce companies that don’t necessarily need or want a huge and costly ERP system.”
Ward adds some additional context about how they are different from the competition in the way they approach contracts.
“Anybody who has gone through contract negotiations with big ERPs knows that they can expect long contract commitments—often three years—and huge annual fees. The big difference with Luminous is that we provide the same level of certainty that the implementation will work but without the price gouging on the contract and without the long commitment. Luminous offers a month to month contract. And we guarantee a successful implementation,” says Ward.
Ward recently went on Jason Klug's @Klugonyx podcast, Founders Field Notes, (West Valley City, Utah) where they discussed several issues Luminous is tackling. Jason Klug is also founder and owner of Dorai Home, an e-commerce company that joined Luminous as a result of Ward's and Klug's conversation, excerpts of which are shown here:
and here: