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Has the Divvy Mafia "Done it Again," this Time with Redo?

Has the Divvy Mafia "Done it Again," this Time with Redo?
Photo by Giorgio Trovato / Unsplash

Draper, Utah-based Redo announced a $24 million round of Series A funding last week, which is certainly newsworthy in and of itself.

But what this author finds especially intriguing is the fact that this still young startup has also assembled many of the top team members of Divvy, with rapid growth following quickly behind their addition.

To be clear, it's not just Team Divvy that's involved with Redo, it's also Pelion Venture Partners, Utah's largest VC firm and one of the earliest investors in Divvy.

So ... is it possible that Redo will take the path of Divvy as well?

When you metaphorically accelerate from 0—60 miles per hour in a previously unheard of time frame, people tend to sit up and take notice.

Hence, when Lehi, Utah-based Divvy achieved (at the time) the biggest tech acquisition in state history in May 2021 for $2.5 billion in cash and stock by Bill.com, people did just that ... they sat up and took notice.

By way of background, Divvy had launched less than five years earlier in late 2016 with the goal of solving the seemingly intractable challenge of expense tracking and management, especially for small-to-medium-sized businesses.

Soon Divvy discovered that not only was that problem widespread, especially in the SMB space, but the investment community couldn't seem to help but throw money at Divvy, landing

  • $7.0 million in Seed Funding in December 2017,
  • $10.5 million in an A Round of Funding in May 2018,
  • $35.0 million in B Round Funding in July 2018,
  • $200.0 million in a C Round of Funding in April 2019, and
  • $165.0 million in a D Round of Funding in January 2021.

{NOTE: That D Round of funding occurred essentially 12 months after the COVID-19 outbreak began in the U.S.; yet it also garnered Divvy a valuation of $1.6 billion at the time.}

Four months later Bill.com pulled the trigger on buying Divvy at a $2.5 billion valuation.

Clearly it was massive news, especially within Utah's business community.

But for thoughtful individuals, the underlying question was "Why?"

"What was it about Divvy that caused Bill.com to offer $2.5 billion for this Lehi-based firm?"

As it turned out, the data (and the reasoning) was there, if you knew where to look.

As I outlined at the time in Deseret Business Watch, it turns out that Divvy had grown to over 7,500 SMB customers by mid-2021, producing an ~$100 million run-rate of annualized revenue when it was acquired.

What was even more compelling, however, is that Divvy's platform focused on the SMB market of credit card/payment card/finance management, a Total Addressable Market of ~$25 trillion, a TAM that Bill.com did NOT serve at the time.

In other words, the Divvy acquisition represented a potential "steal" for Bill.com, even at a $2.5 billion price point.

So ... what does all of this have to do with Draper, Utah-based Redo?

The Prescient Founder — Creator — Inventor

On top of being one of the best professional hockey players of all time, Wayne Gretzky is also famously remembered for answering a journalist's question about why he was so fantastic at hockey with this reply:

"I skate to where the puck is going to be."
Wayne Gretzky photo by Hakandahlstrom (Håkan Dahlström) via Wikipedia and downloaded 26 August 2024.

Such an ability of foresight, the ability to see the entire rink, court or field in an instant, is part of what makes great competitors into Hall of Fame superstars.

And in my opinion, this truth applies to every field of endeavor.

However, in team sports — including the sport of business — it is rare that a company founder is ever truly successful on his or her own.

It's like the concept behind the cliche,

"There is no 'i' in team."

In reality, my experience is that the best Leaders/Creators/Inventors realize this fact, even if they have identified a massive market opportunity, one that's dying to be solved.

Hence, as quickly as possible, they look to surround themselves with excellent colleagues and team members to help make success a sure thing, at least one that's as sure as it can be.

Clearly, such was the case with Divvy Co-Founders, Blake Murray and Alex Bean, as (in hindsight) it's obvious that they built an amazing team to help drive Divvy on to victory in what was a very short time frame.

That said, who or what is Redo?

Well ... Redo is the brainchild of Tay Brown, a young eCommerce entrepreneur living at the time in Arizona who had a flash of inspiration:

"What if I could offer unlimited, hassle-free returns to online merchants (and their customers) who are selling on their own platforms and not on Amazon? And make it free to the merchants."

On the surface, it sounds like a simply brilliant a-ha moment, one full of prescience.

And yet, foresight alone is not enough to create success, something that Brown came to forcefully and painfully realize in 2020, as he outlined last week in a 4-Part Redo Story on his LinkedIn Profile:

In rereading Brown's 4-Part story last night, I came across this numbingly powerful statement:

"As the founder, it was my moral obligation to give Redo anything to become as big as possible. Even if that meant stepping out of the way."

{NOTE: Talk about humbly powerful insight. Wow!}

Hence, close to a year ago, that belief was what led Brown to reach out to Sterling Snow to ask if he would consider becoming both Redo's Chief Executive Officer and a Co-Founder?

In case that name doesn't ring a bell for you, Snow was

  • Divvy's Chief Revenue Officer for 4 years and 9 months,
  • Then the Senior Vice President of Revenue for 2 years and 1 month at Bill.com, and ... at the time of Brown's question, Snow was (and still is)
  • A Venture Partner with Draper-based Pelion Venture Partners, a position he's held since June 2023.

By then, mid-2023, Pelion had already led a $2.0 million round of Seed funding for Redo.

Bottom line, Snow said "Yes."

And as Brown explains in Part 4 of his story (see above), things began to accelerate quickly for Redo ... for the better.

Getting the Team Back Together

One of the things I find fascinating about sports teams is the fact that IF you can pull together the right players into a cohesive team, one that learns how to work together through both success and failure, the likelihood that that team can win again and again goes up exponentially.

So, when I learned that Sterling Snow had joined Redo as its CEO, I took notice.

But then, when I learned that he had also pulled together several notable members of Team Divvy over the past year to join Team Redo ... well, let's just say that I raised my eyebrows, and cocked my head to one side, and muttered a "Hmmmmmmm" under my breath.

Whom, you might ask, has joined Redo that had been part of the Divvy squad?

Well, for starters (as noted by Snow in this LinkedIn Post), the list includes

  • Tyler Hogge, ReDo, Board Member; [Divvy: SVP Product & Risk, 3 years 8 months];
  • Blakely Cragun, ReDo Chief Strategy Officer; [Divvy CFO, 4 years 10 months];
  • Eric Lepretre, ReDo Head of Finance; [Divvy Sr. Manager - Finance & Strategy, 1 year 10 months; Bill.com: Sr. Director - GTM Finance & Strategy];
  • Aaron Evett, ReDo Head of Revenue; [Divvy: VP of Sales & Implementation, 4 years 7 months];
  • Jared Cahoon, ReDo's GM - Product Development; [Divvy: Sr. Manager, Enterprise Account Management, 4 years; Bill.com: Director of Sales, 1 year, 7 months]; and
  • Jordan Bleak, ReDo's Head of Post Sales; [Divvy: Customer Success & Account Management, 5 years 2 months].

And those are only the individuals Snow mentioned in his LinkedIn post.

Additionally, although she wasn't on Team Divvy, Pelion Principal (Susannah Duke) was the first at the VC firm to sniff-out Redo's potential, prescience that resulted in Pelion leading Redo's $2.0 million round of Seed Funding in 2022.

Additionally, Duke was tapped as a Redo Board member for 2+ years from May 2022 through July 2024.

Then in July 2024 she

  • Transitioned to a Board Observer slot, while she was also
  • Named Redo's GM - Product Development.

The reason why all of this matters is that Redo announced last week on social media that it has closed a $24 million round of Series A funding.

The round was led by Pelion, with participation from three other Utah-based VC firms:

Other firms that joined the funding round included

  • Cervin Ventures, and
  • AGLAÉ Ventures (the venture arm of LVMH).

Conversely, some of the individual investors who participated in the round included such current Redo customers as

Additionally, Snow noted that the investment round also included such notable angel investors as

The Redo Difference

In closing, Redo has built an initial service platform for eCommerce companies comprised of four interrelated components that support and build upon each other.

As Tyler Hogge explains in "The Redo Opportunity" on TylerHogge.com, the concept behind Redo begins with this:

"... one of the main concerns a buyer has when purchasing online is how big of a pain it will be if they have to do a return. That concern is friction to buying. And friction to buying lowers conversion."

This is especially true when it comes to consumer purchases, but it's also true with many business-to-business eCommerce transactions as well.

That being the case,

  1. How is Redo addressing this issue and others?
  2. And what kind of results is Redo producing?

As Hogge explains at the very beginning of his nearly 3,000-word blog post, Redo has experienced:

  • "... unbelievable revenue growth over the past 18 months,
  • "(launched) a suite of 4 live products on the Redo platform (so far),
  • "(captured) over 1,500 delighted customers (growing rapidly every month),
  • "with some of the most impressive brands on earth, and (is doing so with)
  • "a vision that will dramatically improve the lives of every online retailer and will reshape e-commerce."

Okay.

So, rather than try to explain what Redo is doing (and why), I invite you to turn to Hogge's blog post instead — ("The Redo Opportunity" on TylerHogge.com) — to fully begin to grasp/understand the opportunity Brown, Snow and others are attacking today.

That said, I think Brown, Snow, Pelion, Team Divvy, and Team Redo are onto something, something that might be really, really big.

In other words, I definitely plan to keep an eye out for Redo in the weeks and months ahead.

A Closing Observation

Because Brown had the apparent "misfortune" of starting Redo in "Year One" of the COVID-19 outbreak, there's no chance it can achieve the same success as Divvy in the same time frame, i.e., under five years.

Just. Not. Possible.

However, that does not mean Team Redo cannot mirror a similar growth trajectory as Divvy.

That, my friends, IS possible.

Likely? Maybe.

We'll have to see.

But that, that is what I'll be interested to discover.

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