Diamond Logistics secures loan to expand partner network

Diamond Logistics has secured a seven-figure loan from Frontier Development Capital to support the expansion of its national network.

The UK-based company aims to revolutionise the logistics industry by connecting small businesses, or 'partners', to compete more effectively against larger delivery firms. Diamond Logistics is currently recognised as one of the fastest-growing e-commerce fulfilment providers in the UK, with approximately 40 partners servicing over 1,000 clients nationwide.

The company's Despatchlab platform provides a comprehensive solution for order management, warehousing, and delivery. It facilitates retail businesses in outsourcing logistics to local providers and manages orders from more than 60 online marketplaces. The system aids providers in operational management, streamlining processes, and offering diverse delivery options, including same-day and international deliveries.

Founded over three decades ago by Kate Lester, Diamond Logistics initially operated as a courier service. In 2022, the launch of Despatchlab marked its transition into a technology provider, supplementing its logistics model with software development. Despite its modest staff of 15, the company projects a revenue increase exceeding 20% this year, potentially reaching GBP £10 million.

CEO Kate Lester commented, "Our aim is to empower small operators to grow their business as part of a bigger network and with the type of advanced technology that may otherwise be beyond their budget. Our platform is so efficient that it can handle 97% of logistics tasks without human intervention."

She further noted the value of their services to both traditional logistics users and e-commerce enterprises, stating, "The funding will enable us to grow the network in line with our aim to ensure that every business has a Diamond Logistics partner within 45 minutes from their door."

Kathryn Light of Frontier Development Capital remarked on the strategic importance of technology in the logistics sector, especially given the increase in e-commerce and demand for rapid deliveries. "Diamond's technology enables small firms to transform their operations and to thrive and grow in this fast-paced, competitive market. The funding will enable Kate and the team to continue to innovate and enhance the platform, and to establish the network as a leading fulfilment provider," she said.

Ricky Lane, Director at HMT LLP, whose team advised Diamond Logistics on fundraising, expressed confidence in the transaction. "The transaction is an endorsement of the strength of the Diamond offering and in particular the Despatchlab platform in the third-party logistics and e-commerce fulfilment sector and the ability the technology will give the business to build scale. FDC have provided a structure that will preserve cash flow in the business as it continues to mature and scale the existing partner network," commented Lane.

Paul Spires of Inspire Business Development conducted financial due diligence for FDC, while legal advice was supplied by Chris Jones and Karem Al-Dahleh of Gateley plc for FDC, and Stuart Hutson of Temple Bright for Diamond Logistics.