Parcel Pending founder and Chief Executive Lori Torres isn’t the only one smiling after last month’s sale of her upstart Irvine-based company, which uses electronic lockers and proprietary software to store and access delivered packages.
Also excited about the sale of Parcel Pending to French mail services company Neopost, which bought the company for a figure cited as more than $100 million: Orange County’s startup ecosystem, which kicks off 2019 with a high-profile and highly profitable exit.
Parcel Pending is “a case study in local entrepreneurship,” according to Grant Van Cleve, chairman of the board of governors for local investor network Tech Coast Angels, noting that Torres’ company was developed and funded using OC resources such as the Small Business Development Center, OCTANe, and TCA.
TCA invested $1.25 million in Parcel Pending shortly after Torres started the company in 2013, alongside other undisclosed investors.
In 2016, a separate Newport Beach investment group is reported to have kicked in an additional $15 million.
Van Cleve said last month’s sale brought in a nearly 20-fold return for Parcel Pending’s initial investors, which translates to about $25 million for TCA and its co-angel investors.
Torres thinks Neopost—a nearly $800 million valued company that provides an assortment of mail services, and is looking to crack the U.S. market for electronic lockers—got itself a deal. Her goal originally was to get the company to $100 million in revenue and sell it for $300 million.
Last year, Parcel Pending posted revenue “north of $30 million,” according to Torres, and had more than 160 employees.
“The funniest thing is, I think we could have gone higher if I would have waited two more years, but at the time it just felt right,” she said. “You can’t be greedy. You just have to make the decision.”
Apartment Background
Before starting Parcel Pending, Torres spent 13 years with Newport Beach-based real estate developer Irvine Co.—one of the two largest owners of apartments in California— most of those as a senior vice president of property management in charge of over 40,000 apartment units.
She was familiar with the problem package delivery caused for property managers in large residential buildings and set out to solve it.
Her idea? A locker system that used technology to allow residents to pick up their own packages without the involvement of property managers.
It wasn’t her first great idea. She had one 20 years prior, but never acted on it.
That idea was Elf on the Shelf, now a popular holiday activity for families and young children. Someone else came to market with it, and now Torres sees the elf floating above New York City each year as part of the Macy’s Thanksgiving Day parade.
“I knew I missed out on an opportunity there and this had that same burning feeling here,” she said. “I knew that the problem was going to be so big, because online shopping was so big, so I knew I had to go after it.”
In 2013, Torres left the Irvine Co. to start Parcel Pending. She invested her own money in the project, and sought investment partners.
Hans Imhof, who was the TCA deal co-lead with Van Cleve and served on Parcel Pending’s board, has started 14 companies by his count, and invested in many more.
He met Torres when she came in to pitch her company to TCA, and said he liked her right away because she was “a go-getter.”
“I have worked with a lot of CEOs in my lifetime and she was by far the best,” said Imhof.
Torres was a recipient of a Business Journal’s Innovator of the Year Award in 2017.
When Neopost first approached Torres about the sale, she talked with Imhof about it.
His advice? “If it’s that price, it’s OK.”
The sale to Neopost happened quickly, with only 32 days between the letter of intent and the closing. Post-sale, Parcel Pending will continue to be based in Irvine, and Torres will stay on as chief executive for at least the next two years.
Home Offering
Torres said the company isn’t slowing down at all, but is still “full steam ahead, running with our hair on fire.”
The company has installed over 2,700 systems to date, which translates to 160,000 locker doors, according to Torres.
“We take over 1.2 million packages a month,” she said.
Parcel Pending announced earlier this month that it’s rolling out a new product line: lockers for individual homes.
The company is partnering with Horsham, Pa.-based luxury homebuilder Toll Brothers in Las Vegas to install single-family lockers in projects there. Torres said she hopes to quickly roll out the offering nationwide.
Torres couldn’t disclose whether or not she has a noncompete agreement in place with Neopost, but said she would start another company if she found the right idea.
“It has been a blast, I would do it again in a minute,” she said. “I’m sure I will do it again, I can’t do anything for a couple years but there will be something next.”
Courage
Van Cleve said Torres’ story is something that other potential entrepreneurs in OC are likely to study closely; a highly-paid, well-respected executive who took a “real life risk” to start a company, rather than a college kid in a garage with nothing to lose.
“That’s good old American dream stuff there, it took courage along the way,” he said.
Van Cleve thinks the success of Parcel Pending will inspire other investors and entrepreneurs in the area.
“It is going to get more money off the fences and willing to do angel investment,” he said. “It is going to get the executive with a good idea to have more courage and go forward.”
Torres said there are many resources in OC for entrepreneurs, and she hopes to add to them by mentoring, and maybe even investing in new businesses.
“I’ve met all these amazing people that helped me,” she said. “For no money, for no cost. It was amazing how many people were willing to help the whole journey.”
