SendCutSend raises $110M from Sequoia and Paradigm to become the 'Amazon of manufacturing'

Speaker 2: Nothing can compete with the feed. Yes. Sorry to blackmail. But it's over.

Speaker 7: It's not

Speaker 1: over for our next guest because Jim Belosic from Send Cut Send is with us. He's in the waiting room and there's some exciting news about Senkad Sen. Welcome back to the show, Jim. How are you doing?

Speaker 4: Good. Good. Thanks for having me.

Speaker 1: Thanks for hopping short notice. Congratulations. Reintroduce the company and then I wanna hear the news.

Speaker 4: Yeah. Senkad Sen is a on demand manufacturer. Elastic capacity is what I was told. So we make make

Speaker 1: stuff This guy has VCs now.

Speaker 2: Yeah. Yeah. Yeah.

Speaker 1: Yeah. Buzzwords come they come

Speaker 2: with a term sheet. I can offer you capital and buzzwords.

Speaker 1: And buzzwords.

Speaker 4: They're they're good at both.

Speaker 1: Yes. But I like it. I like it. Elastic capacity.

Speaker 4: Yeah. We do sheet metal and CNC and you know whatever. People need something made, make it warm.

Speaker 1: Yeah. And the news today, what happened? Wanna I hit the gun.

Speaker 4: I finally raised some money.

Speaker 1: How much it is?

Speaker 4: 110,000,000.

Speaker 2: Massive. Let's go. Let's go. Yeah. It's it's sort of bittersweet bittersweet moment because SendCut Send is a company. We've interviewed thousands of founders now. And you have been, out of all the conversations we've had, at the top of our list in terms of companies cultures and teams that we're bullish on. And we always appreciated that you were doing it independently. But I'm sure you've raised for very good reasons and you have some excellent new partners and we're very excited for you.

Speaker 1: Yeah. I I wanna talk about the the the use of funds, the reasoning. But first, like, take me through the pitch that you received. Who who who did the round? How did you meet them? Take us through the kind of story of the deal.

Speaker 4: So I just through X, I got introduced to Patrick Ollison Yeah. Which was awesome. Yeah. And he's like, oh, I've heard about your company. You guys sound really awesome. I'll invest. And I was like, well, shit, that's that's amazing. Thank you. I was like, how does this work? Like, I don't know how investment works. And he was like, oh, I'll just introduce you to a couple other people. So can just use standard quite.

Speaker 2: Y c terms. No, I'm kidding.

Speaker 4: Yeah. No. Well, I was like, hey, know, introduce me to someone who's super founder friendly. Mhmm. I'm a bootstrapper. I want to retain control of my company, but I do want to go faster. So I need a little bit more money than I got now. So introduced me to Sequoia. Andrew Reid over there is awesome. Sean Maguire. And then Matt Wong from Paradigm

Speaker 1: Yeah.

Speaker 4: As well. And so it became this kind of dream team and I was like, shit. If I don't do it now, like, I don't know if I'll ever be able to put this together again, so let's go for it. Let's see what happens.

Speaker 1: Yeah. And I also think

Speaker 2: you guys have such incredible have had such incredible organic momentum and growth and we need to make stuff in America and it's somewhat your responsibility to go faster like as like just for the country basically. And so from that lens too, think it makes a ton of sense to bring in some more firepower.

Speaker 4: Yeah. We're always capacity constrained. We we have more work than we can produce and even if even if we had the right amount of machines, it's not fast enough. I want to go faster. You know, people are spoiled on Amazon. I want to do Amazon of manufacturing. If you order today, should have it in your hands tomorrow so then you can go do your project. And now that's that's on the horizon. We're getting really close.

Speaker 1: Yeah. So what does the money actually go towards? Is buying more machines, hiring more people, both? Like what what like what are you pulling forward with this capital?

Speaker 4: Yeah. So I'm trying to just use the capital towards stuff that I can't finance. Mhmm. So right now, like we've been able to grow like, you know, I can buy machines and get a loan on them from Yeah. JPMorgan or whatever. So I'll keep doing that with machines. Yeah. But the capital is going to be used for stuff that I can't get a loan on. So, you know, tripling the size of my software team Mhmm. Computational geometry engineers, hiring two or 300 people, just a just a down payment on on a building. Like, the first and last payment is like, I don't know, together it's like $600,000 on some of these big buildings. So that's that's where I'm gonna light their money on fire in a good way and we're gonna grow grow grow.

Speaker 6: Yeah.

Speaker 1: Yeah. Where is the current facility? Where do you see yourself expanding to? I wanna talk about the actual footprint because, you know, if you're building elastic capacity, that feels like that needs to be distributed all over The United States at some point.

Speaker 4: Yeah. A million percent. My goal is like I I love Home Depot. And without a Home Depot in your town, you gotta go to a plumbing store, an electrical store, and a lumberyard, and whatever. So if we could have, a SendCutSend in a bunch of different metros that you can just walk into and get something made, that's the dream. So right now, we're in Reno, Nevada Arlington, Texas and Paris, Kentucky. The next one up, I'm hoping for a lease here, is gonna be somewhere in Pennsylvania, potentially in Ohio, but we're we're trying to pit those two states against each other and negotiate some good incentives. So I can't really say Yeah. Which way we're going.

Speaker 1: Yeah.

Speaker 4: After that, probably Indiana, Las Vegas, and then Atlanta.

Speaker 1: Okay. I had I had sort of a hot take yesterday talking about the the pushback to building data centers. And and my point was that obviously data centers are the least they're they're they're less popular than nuclear reactors. Nuclear reactors at their worst, I think we're polling at like 63% disapproval for like let's not build those and of course we stopped building them. Data centers are like 73%. So people really don't like them. But my point was that there's a lot of there's a lot of pushback against building anything even like housing, roads, trains. Like people are just like, I like the idea of it somewhere else, but I don't want it in my backyard. I don't want it over here. Like if it actually interfaces me. And I'm wondering if how local communities are actually receptive or skeptical about having what is essentially a factory and could be noisy or could have traffic or could have a bunch of different things. And I imagine that you've had like one millionth of the pushback, but you've still had to consider all these things. So how have you how have you communicated to the local communities that you build in and you're planning to build in?

Speaker 4: Yeah. I think some of the the loudest pushback is from, you know, people in these big coastal cities and, you know, they're like, I don't I don't want that that in my backyard.

Speaker 1: Yeah.

Speaker 4: What we find is, you know, and we're in a smaller city or a rural area, people love the jobs. Yeah. They love the development. They love the the taxable revenue that comes with us. We're also we're pretty damn quiet. We don't exhaust sewer or air or anything. We're we're 50 state compliant. That's that's our goal. But what what's really cool is we can come into a community and provide a lot of good high paying jobs. Mhmm. You know, it's it's a career path that they can grow into. There's more opportunities. As we build more buildings, they can move out of their little town and go to a different metro or whatever. Sure. We don't have any pushback. Also, we move so damn fast that we don't build our buildings. We go find a building that's already stood up and we just move in. That's the only way for us to go fast.

Speaker 1: Yeah. Yeah. And there's plenty of and there's plenty of capacity there. As you look back on your career, how did you process the the the VC hype or just the memes around like the three d printing revolution? And there was a moment where there was like, oh, like there won't be any more factories. Everyone just three d print everything at home. How do you process it at the time? And I guess like what like how do you see three d printing fitting in, if if at all, into, like, the future of reindustrialization? Does that have a place whatsoever?

Speaker 4: It it does. It does. In the world of metals, we're still far away from that. Yeah. It's so much easier to get something cast or stamped or laser cut or whatever. I mean, when we've experimented with three d additive in house, like, there's laws against how much of that aluminum powder you can have because it's explosive. So Mhmm. There's massive hurdles to clear for that. However, three d printing, it's it's actually really competitive with injection molding and that's something that we're looking at. Injection molding is incredibly expensive to get the molds made. They're almost all the molds are made offshore. But if you can three d print really really rapidly, then it is competitive, especially for small runs or startups or prototypes or whatever. So that's an area that we're experimenting in.

Speaker 2: Mhmm. What are some recent customers that you started working with that you're particularly excited about? They can be mom and pop, hackers, or big big companies, but wanted to give you a chance.

Speaker 4: Yeah. We we actually my comms team that I have now just just told me I have to be careful about who I name. We were pretty proud though. Like, it is it is mom and pops, but then it's also, what, 85% of the top five primes and the tier one defense people use us. Wow. Nero Nero is a huge customer. Zipline is a huge customer. And then just guys in their garage making cool stuff and like kids doing first robotics or whatever. They all use us. So very, very wide spectrum of customers.

Speaker 2: Amazing.

Speaker 1: What what does the entry level job at Sencut Sen look like these days?

Speaker 4: Anything. You're a generalist. Okay. We are moving so fast and doing so many different things. Like, we don't have a designated floor sweeper, but you might be sweeping floors. Okay. You know, we start somewhere between like 26 and $30 an hour Mhmm. And then it goes up from there. Wow. But, yeah, you're you're gonna be maybe a laser operator one day. You're gonna be driving a forklift. You're gonna be cleaning out a dust collector, or you're gonna be doing some intense CAD programming. Like, who knows? Yeah. We don't know what we're gonna make that day. Things just come in, and we have to do it. So everyone here is very, very flexible.

Speaker 1: Yeah. With with the crazy, like, AI build out and data center build out going on, we've heard and seen, like, prices of copper spiking. Like there's all these weird knock on effects from data center construction. Are you feeling squeezes anywhere in your supply chain? Do you feel like America is industrialized enough in in the your rest of your supply chain? Or is there, like, a wish list of, oh, we got to reshor that?

Speaker 4: We need to we need as many, like, aluminum boundaries and smelters as we can possibly get. I mean, are way more electricity intensive than data centers. Yeah. Actually, if you if you tried to spin up a bunch of those, it would make a data center look really good in comparison. So that's

Speaker 1: That's interesting.

Speaker 4: If you wanna build a data center

Speaker 6: Yeah.

Speaker 4: Go pitch an aluminum foundry first

Speaker 1: Wow.

Speaker 4: And then they'll want you to do, like, 10 data centers. So

Speaker 5: we need more

Speaker 1: of those. Yeah.

Speaker 5: But we need nuclear

Speaker 1: I saw that with the Strait Of Hormuz closing that Diet Coke was at risk of going out of stock, very, very harmful to my production function. But because some there's some amount of aluminum smelting that happens in The Middle East and passes through the Strait Of Hormuz, and so delays happen. And I think a lot of people are they they they think it's either we have the capacity in The US or maybe it went to China, but there's really nothing else, but we're in such a global economy that there's so much more going on.

Speaker 4: Yeah. It affected us a little bit. You know, they're about 15% of aluminum comes from offshore. Yeah. We actually source a lot of domestic aluminum or at least it comes from North America. But, you know, even if prices go up 20%, raw materials are a small fraction of the overall end price. So 15 or 20% increase in raw materials is probably three or 4% to the customer. So Yeah. Our customers have been pretty cool about it.

Speaker 1: Yeah. Yeah. I mean, Jordy asked about the the the customers, like specific examples, but I'm interested in like the broader funnel. Like how much is do you have an outbound sales force at this point? Are you going to conferences? I imagine that you show up on like Google results oftentimes. But what, like, is it is is the customer funnel, like, heavily diversified? Or is there a sweet spot that you're really doubling down on right now? What does acquisition look like these days?

Speaker 4: We've always been inbound. Inbound. We we have two or three sales guys right now, but they just, you know, answer the call and Yeah. You know, do special special projects or whatever. Yeah. We have no outbound sales guys. At one point, early on, we were spending about $100 a month on Yeah. Google Ads and I think right now we're spending about 1,500 Wow. So my message to

Speaker 2: anyone wants

Speaker 1: to do this.

Speaker 2: Is that because if you were if you were spending more or you hired more salespeople, you just wouldn't be able to fulfill the demands, you need to scale capacity first?

Speaker 4: Yeah. Yeah. We my marketing team usually I'm like, say nothing. Don't say anything this week because we had a machine go down or or whatever. So I'm like, stop. Everyone go quiet. So, yeah, it's it's always chasing capacity. But my message to anyone who wants to do something like this, just have a kick ass product. Yeah. Just make it good and fast and you know, get it in their hands within you know, a couple days or whatever and people will come back and they'll tell their friends. So But it's an overnight success takes ten years. So we're

Speaker 2: And when you guys are fast when you guys

Speaker 4: are punched fast in the face.

Speaker 2: Yeah. When you guys are fast, your customers can build their products faster and have higher sales velocity themselves and generate more revenue and so then they end up spending more and it's like this very, virtuous flywheel and I'm so glad you're well capitalized.

Speaker 1: Yeah.

Speaker 2: I yeah. This is a major white pill.

Speaker 1: Yeah. I I I hope I don't have to

Speaker 4: do it again because fundraising is not fun. I hate finance.

Speaker 2: Get ready get ready for for an ICEE, buddy.

Speaker 1: Yeah. There's gonna be many more many more in the future.

Speaker 2: It's it's your duty.

Speaker 1: Yeah. If you if you want if you want to go fast and far, it makes sense. Last question. We were talking about the falloff of dad books because of podcasts and fertility and all this different stuff. And I'm interested if you have any examples or recommendations for father son building activities that you've seen from the community or maybe you've done yourself even or employees have of a good first build for a a for a parent and child to do that might use SendCutSend parts?

Speaker 4: Yeah. There's there's a ton of little like push go kart plans available. We may even have a couple on marketplace. I'll I'll have to check.

Speaker 1: Cool.

Speaker 4: But you have to do something that the kid can enjoy and there's nothing better than like getting pushed down a hill and scraping your knees or whatever. To have those experiences, something that's usable. Like a birdhouse or whatever, that's fine. Yeah. A go kart or a scooter or something like that is pretty cool for

Speaker 5: the kids.

Speaker 1: So if I make a go kart using SendCutSendParts and I want to throw a v 12 in there, can you fabricate that for me too?

Speaker 4: Not yet.

Speaker 1: Not yet. Okay. That's what the money's for. Yeah. And we're gonna

Speaker 2: spend Yeah. Kart is such a smart recommendation too for you, you know, running a business Yeah. Because a bird feeder, you know, you make it once, you put it up, it's good. Yeah. My my dad built me a go kart growing up. And I he would he would, you know, he made it. I would drive the heck out of it. It would break, then he'd be fixing it. So you're gonna it's a recurring revenue for you guys to get a father son duo into go karts.

Speaker 1: That's smart.

Speaker 4: A 100%. Yeah.

Speaker 1: Never ending. Playing Well, the long congratulations and thank you so much for coming on the show.

Speaker 2: Yeah. Great to see you, Jim. Congrats to the whole team. Great to Excited see to see you back on here soon.

Speaker 1: Have a good one. Cool. Thanks, guys. Goodbye.

Speaker 2: Cheers.

Speaker 1: Legend. Fantastic. White pill. White pill of the show. Major white pill.

Speaker 2: We were black pilling. Now we're white pilling.

Speaker 1: Never black pill.

Speaker 2: Never black pill.

Speaker 1: Well, up next, we have Aidan Dewar from Nourish. He's the co founder and CEO. He's been on the show before, but we're welcoming him back with some huge news about the company that's growing faster than ever with a massive series c to announce. Aidan, how are you doing? Think we might have some technical Can you give us a hello? Can you say hello? We might need to come back to you. How are we doing? Are

Speaker 2: a you potato as a webcam?

Speaker 1: It's not the potato. It's the WiFi. It's for sure the WiFi. Do a do a check one too.

Speaker 2: Yeah. Do a check one too.

Speaker 6: We'll

Speaker 2: kill some time.

Speaker 1: We'll kill some time because Dan Sondheim. Killing time with Dan Sondheim. So wait, okay. So this is actually funny because I I opened up the Wall Street Journal today and I had seen I had seen the news from Tay Kim who's coming on the show this week that in the Financial Times they had a report that Daniel Sondheim's d one Capital Partners is another hedge fund that stands to make a killing when SpaceX goes public. D one is sitting on paper gains of about 9,000,000,000 on SpaceX stock that it acquired over several years for about 600,000,000. What? A run of 15 x. Not bad. And so now the the stake might be worth 20,000,000,000 if the rocket maker is valued at the expected 1,750,000,000,000, a figure that could still change according to people familiar with the matter. But I open up the Wall Street Journal and I and I'm and everyone's familiar with Dan Sondheim and and d one. He's Dan Sondheim. He's not like someone who's obscure behind the scenes. He's done invest like the best. People know d one. They invest in a lot of companies that we know. But I thought this Wall Street Journal article was also about d one, and the title is Obscure Fund Has a Lot Riding on SpaceX. And I was like, are they really painting d one as an obscure fund? They weren't.

Speaker 2: D one, the grand

Speaker 1: They're about a different yes, yes. They're talking about a different investment firm that's about to make a lot of money on the SpaceX investment. So SpaceX's planned initial public offering is expected to be a windfall for futurist investors and venture capitalists. You got SpaceX shares in your you don't want say, I'm not a VC. Say you're a futurist investor. A public a publicity shy hedge fund manager whose other investments so you're a hedge fund. You're long SpaceX. What else are you buying to diversify your portfolio as a futurist investor? Dick's Sporting Goods and Wingstop are among the big positions at Darsana Capital Partners, which first invested in SpaceX in 2019 when Elon Musk's rocket maker was valued at around 30,000,000,000 and made several subsequent investments since then. Should SpaceX go public at evaluation around 1,500,000,000,000, Darsana paper Darsana's paper gains on the investment could top $10,000,000,000. So had you ever heard of Darsana before? No. I actually had not, but I have heard of Wingstop. It's a good good stock. Several billion of that would be gains since

Speaker 2: Stock is down 50% year to date.

Speaker 1: Rough. The sort of valuation. Anand Decide launched New York based Arsana, which comes from a Sanskrit word that means seeing the true nature of reality, chicken wings and Dick's Sporting Goods. In twenty fourteen, one point four