Dream to capture US tertiary market

Photo / Brett Phibbs

Service seeks edge over rivals by matching universities with suppliers at lower costs

Scott Blackwood wants to own the United States - its US higher education procurement management market, that is.

Blackwood is intent on capturing a sizeable chunk of the 5000 higher education institutes in the US with Unimarket, his software-as-a-service solution. Blackwood says Unimarket has the edge over its rivals on a number of fronts.

Unimarket matches customer product needs with suppliers, such as university orders for new dormitory mattresses.

Tenders can be seen by other universities, who can add their requirements to the order.

Organisations gain through pooling orders and suppliers benefit from being able to offer volume discounts across multiple institutions.

Unimarket can keep customer costs relatively low as it is run over the internet rather than through the traditional desktop software model, which requires on-site installation and software updates. Additional revenue comes from taking a small percentage of supplier sales for premium services.

Blackwood says it is like a Trade Me for businesses and particularly suits public-sector organisations, which are able to collaborate freely on purchasing products.

He is now seeking backing from the University of Auckland Business School Entrepreneurs' Challenge to boost his US ambitions and grow the business in New Zealand and Australia. As one of 10 finalists, Unimarket is in the running to gain a share of up to $1 million in funding and business mentoring.

The idea for Unimarket was born out of Blackwood's time doing an MBA in Pittsburgh while he worked for consulting and accounting firm Ernst and Young. He was working with big companies to streamline supply chains. "I just felt there was a better way," he said.

Moving back to New Zealand to raise a family spurred Blackwood to turn his idea into a reality.

Several years of living in debt while working out of his garage saw Blackwood and co-founder Damien Hollis make their first big sale to the University of Waikato.

An audit by Ernst and Young was the final check before the university agreed to sign up. Blackwood said he and Hollis were probably wearing shorts and jandals to celebrate the news but realised the auditors were going to want to eyeball them in their makeshift office.

His inside knowledge of Ernst and Young meant he knew the "two blokes in a garage" set-up would only gain them black marks.

Scrambling for suitable accommodation saw Blackwood connect with the Icehouse business incubator. Within a week of getting their university deal, the auditors knocked on the door of the Icehouse and "we looked pretty professional", said Blackwood.

Since moving into the Icehouse in 2006, Unimarket has grown to 44 customers with backing from several venture capital investors. Blackwood has also moved back to the US.

"My original vision was to build this thing out of New Zealand and ... watch all the transactions flying around the world but that hasn't happened yet."

Now based in Annapolis, Maryland, Blackwood is located among the majority of the US tertiary institutes. He plans to be back in New Zealand within two years once he has established a stable base of clients.

"I couldn't rely on someone I would hire from the other side of the world to get the business going at the speed that it needs to ... I'm the most committed to it; my friends and family have invested in it and I'm not going to fail."