SMU Interview: Growing Trust in Online Model Yields Big Return for Reibus

As reported by SMU, steel prices have already dropped by 10% or more and analysts predict the downtrend will continue next year. “We are seeing a more consistent flow of imports into the U.S. There’s more steelmaking capacity coming online. And we are nervous about the underlying strength of the economy going into next year. I can’t see net demand increasing,” Armstrong said.

Reibus does not expect any significant effect from new federal infrastructure spending next year. “The infrastructure bill, while it feels exciting, is more of a long-term play. There aren’t a lot of bridges going to get built next year that aren’t already planned. The infrastructure bill will improve sentiment. But actually we see demand being flat or slightly down overall in 2022 because of the economic headwinds on the horizon, the volatile labor market and inflation,” Armstrong said.

Boosted by the record-high steel prices, Reibus’ revenues jumped more than sevenfold in 2021, which Armstrong called “validation of the team’s execution.” Reibus has expanded its product offerings from primarily flat-rolled steel to include long products, stainless steel, aluminum and other items. The Reibus workforce now numbers 120, up by nearly 100 from this time last year and halfway to its goal of 240 staffers by the end of next year. The company has moved into a new, larger headquarters space in Atlanta.

Reibus said it has raised $100 million in capital from various investment groups, including most recently $75 million in Series B funding led by SoftBank Vision Fund 2. The funds will be used next year with three primary goals in mind: geographic expansion, including an office in Europe; development of new financial tools; and increased logistics services. “We see deflation in prices and cash getting tighter, and Reibus is bringing fresh liquidity to the market. We have millions of dollars we can use to help people finance purchases, expand payment terms, etc.,” Armstrong said. The company is also offering logistics solutions using an “Uber Freight” model designed specifically for metals. “You tell us where the material is to be picked up, and we manage the entire process from there,” he said.

Reibus anticipates buyers looking more to the spot market next year rather than locking in as many mill contracts. “We definitely see some of our larger customers have more spot availability in their purchasing portfolio because they are trying to stay as close as they can to the market – anticipating a fall obviously.”

Armstrong said customers have grown to trust Reibus and its online business model since its founding three and a half years ago. The proof: its average transaction size has more than quadrupled. “We don’t lose customers. And every year our customer groups spend more money with us. That’s the No. 1 driver of our growth,” he added.

(Editor’s note: Reibus.com is an online B2B marketplace for prime, excess prime and obsolete materials. Unlike passive sites that just list products, Reibus claims to combine in-depth product knowledge and supply chain expertise to provide a full e-commerce experience to mills, service centers and fabricators. The platform matches supply and demand of metals while shortening lead-times, reducing inventory, and streamlining finance and freight services. Reibus is a Title Sponsor for the Tampa Steel Conference, to be co-hosted by Steel Market Update on Feb. 14-16, 2022, in Tampa, Fla. For more information and to register for this in-person event, click here.)

By Tim Triplett, Tim@SteelMarketUpdate.com