Dexterity exits stealth with $56.2M raised for its collaborative warehouse robots

Dexterity emerged from stealth this week to announce its full-stack solution aimed at creating collaborative robotics systems. The hardware-software system is designed for a variety of different tasks, including bin picking and box packing, targeted at warehouse fulfillment and logistics needs.

The Bay Area-based startup has already built up significant support from the investment world, with $56.2 million raised to date, from a long list of backers, including Kleiner Perkins, Lightspeed Venture Partners, Obvious Ventures, Pacific West Bank, B37 Ventures, Presidio (Sumitomo) Ventures, Blackhorn Ventures, Liquid 2 Ventures and Stanford StartX.

The company was founded back in 2017 as an extension of CEO Samir Menon’s Stanford thesis, described by Dexterity thusly, “Menon worked on a control theory framework to describe how the human brain controls and coordinates the body, which serves as a model to distill human skill into mathematical programs that control robots in a graceful human-like manner.”

Part of the company’s appeal appears to be the versatility of the robotics, which are designed to work alongside their human counterparts and operate collaboratively. Among the early adopters for the system are an unnamed “global food manufacturer,” “a worldwide package delivery provider” and Japan’s Kawasaki Heavy Industries.

Dexterity says it’s also seen a boost from the push for essential services during the COVID-19 pandemic, like so many others in the robotics and automation fields, stating that its systems have been involved with the shipping of “half a million units of packaged food.”

Source: TechCrunch, Brian Heater, July 22, 2020

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Brazilian digital freight broker Cargo X raises $80 million

Brazilian digital freight marketplace Cargo X announced that it raised $80 million in Series E investment. This was Cargo X’s fifth investment round, which was led by LGT Lightstone Latin America, with participation from Goldman Sachs Growth Equity, Valor Capital and Farallon Capital among others. This funding round brings the total investment in Cargo X to $176 million.

Frequently called the “Uber of Brazilian trucking,” Cargo X is revolutionizing the Brazilian freight industry, which suffers from fragmentation and visibility issues like in the U.S., but on a larger scale. A substantial part of the Brazilian trucking processes is still dependent on paper-based documents and communication over fax, phone and email. 

Cargo X looks to sort this out, connecting carriers and shippers over a digital platform. The largest digital brokerage in Brazil, Cargo X employs 400 people and connects about 20,000 carriers and their 400,000 truckers with freight. It also offers financial services and a technology edge that keeps the company competitive in the market. 

“Cargo X is implementing an innovative business model and bringing disruptive technology to a segment that has not been digitized yet. With that, it makes the productivity of the road logistics sector in the country increase in a sustainable way, reducing idle capacity in the truck fleets, increasing the income of drivers and decreasing freight costs for shippers and transporters,” Federico Vega, the CEO of Cargo X, told FreightWaves.

The current COVID-19 pandemic has also necessitated enabling touchless operations within supply chains. Vega explained that Cargo X is positioned to offer digitalization and reduce physical interaction via process automation.

“In addition to helping our partner carriers when they need us the most, the new investment will be focused on continuing to develop cutting-edge technologies that allow them to operate 100% online and pave the future of road freight transportation,” said Vega. 

Cargo X has shown enviable 20% month-on-month growth in 2020, even amidst the COVID-19 pandemic outbreak. Vega mentioned that customer feedback has also been positive, with the net promoter score (NPS) standing at 62% for carriers and 57% for shippers. 

The Brazilian freight startup ecosystem has challenges with raising venture capital to execute business – an issue that Cargo X seems to have solved with its Series E round. Vega called LGT Lightstone – the lead investor in the round – one of the most exclusive and select investors in the world, and that it was “strongly aligned” with Cargo X’s goals and values.

For LGT Lightstone, Cargo X was a relevant investment as it satisfied the objectives of the fund in the Latin American region – having high growth and impact with differentiated technological solutions. 

“We believe that this new partnership will help to accelerate Cargo X even more and consolidate the company’s leadership in the sector, particularly at such an important time for the country,” said Gustavo Verdelli, the managing director of LGT Lightstone, on the reasons for the investment.

Source. Techcrunch, Vishnu Rajamanickam, April 9, 2020

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Overhaul Raises $17.5M in Growth Funding

Overhaul, an Austin, TX-based real-time supply chain integrity technology solution provider, raised $17.5m in growth funding.

The round – which brought total funding to $27.5m – was led by Edison Partners, with participation from Abbey International Finance Group.

The company intends to use the funds to bolster product offerings to support broad market use, grow its team in North America as well as in its new European headquarters in Ireland, and expand reach into other key global markets.

Launched in 2016 by Barry Conlon, CEO, Overhaul is a supply chain integrity solutions company that allows shippers to connect disparate sources of data into a platform designed for the logistics industry. The resulting data is transformed into critical insights that can instantly trigger corrective actions, impacting everything from temperature control to handling requirements or package-level tracking, ensuring cargo arrives at its destination safely, undamaged, and on time.

Source. FinSMEs, March 10, 2020

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Convoy raises $400 million to expand its on-demand trucking platform

Convoy, the digital freight network that connects truckers with shippers, has raised $400 million in a Series D funding round as it aims to scale its business amid an increasingly competitive market.

The funding round brings Convoy’s post-money valuation to $2.75 billion.

The round was co-led by Generation Investment Management and previous Convoy investor T. Rowe Price Associates. Asset management firm Baillie Gifford, which has fondness for pre-IPO tech companies, Fidelity and Durable Capital Partners, as well as Series C investors CapitalG and Lone Pine Capital, also participated in the round.

Convoy has managed to attract a slew of high-profile investors — and their capital — such as Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. In the four years since its founding, Convoy has raised a total of more than $668 million. Early investors include Greylock Partners, Y Combinator, Cascade Investment (the private investment vehicle of Bill Gates) and Code.org founders Hadi and Ali Partovi.

And that money has been put to work. Convoy co-founders Dan Lewis and Grant Goodale set out in 2015 to modernize freight brokerage, a fragmented and oftentimes analog business that matches loads from shippers with truckers.

The company has gone from hundreds of loads per week in 2016 to tens of thousands per week across the U.S. Notably, Convoy’s platform handles 100% of the matching, as opposed to having humans complete the task.

Convoy also has about 100 routes, many of them concentrated around economic hubs such as Chicago, Michigan and California, Lewis told TechCrunch.

The 850-person company wants to accelerate those efforts with capital raised in this latest round. However, it’s bound to face more competition. Uber Freight, Loadsmart and Flexport are just a few online marketplaces that are targeting freight.

Convoy has added new features to its platform as part of its scaling strategy. The company launched in 2019 an automated reloads feature that allows truckers to book multiple loads at a time. It also added Convoy Go, which allows drivers to bring their truck cab and hook up to a trailer pre-filled with cargo.

Source. TechCrunch, Kirsten Korosec, November 13, 2019
 

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Looking to become the central hub for logistics management, Shipwell raises $35 million

Shipwell, the software platform for managing trucking logistics, has raised $35 million and is expanding its suite of services to become a full-service hub for logistics management. 

The new round led by Georgian Partners comes as the company has just expanded its suite of tracking and management tools to integrate with FedEx’s parcel shipping services. The company also is planning an expansion into ocean shipping in the coming months, according to chief executive Gregory Price.

The Austin-based company works with multiple service providers — including the logistics services unicorn Flexport — but operates as a marketplace for shippers to connect with freight companies and online tools to manage those shipments. In effect, the company is pitching to any retailer or outlet a version of the proprietary logistics management toolkit that has made Amazon so successful.

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Sponsor 

myCareBase™ is a platform for seniors and their families to find, evaluate, hire and manage home support services, to improve the seniors’ ability to remain living safely in their current home for as long as possible. The caregiver marketplace currently offers candidates in Greater Toronto and Greater Vancouver.

To compliment this platform the company also offers an innovative care management app that centralizes communication and task management among family members and the caregiver, along with a Care Concierge service to help family members with administrative, navigational or organizational tasks.

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Since its last round of funding a year ago, Shipwell has grown to service more than 4,000 customers per month with supply chains spanning multiple geographies. The company now operates in Canada, Mexico and even across Europe.

With the new funding the company intends to open new offices in Chicago and expand to a second location in its home base of Austin.

The company has also launched a new application program interface that allows it to help manage logistics through other modes than just trucking. Price says the company has about 20 companies beta-testing the tool, which is set to launch publicly in November.

Source. TechCrunch, Johnathan Schreiber, October 24, 2019

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Logixboard Raises $4.2M in Seed Funding

Logixboard, a Seattle, WA-based digital partner for freight forwarders, raised $4.2m in seed funding.

The round was led by Social Leverage, with participation from F-Prime Capital, Founders’ Co-op, Techstars Venture Fund, Liquid 2 VC, Bragiel Brothers, and Tom Gonser, the Founder of Docusign. In conjunction with the funding, Social Leverage Partner, Gary Benitt, has joined Logixboard’s Board.

The company intends to use the funds to expand its platform and accelerate product innovation.

continued below 

 ______________________________________________________________

Sponsor 

myCareBase™ is a platform for seniors and their families to find, evaluate, hire and manage home support services, to improve the seniors’ ability to remain living safely in their current home for as long as possible. The caregiver marketplace currently offers candidates in Greater Toronto and Greater Vancouver.

To compliment this platform the company also offers an innovative care management app that centralizes communication and task management among family members and the caregiver, along with a Care Concierge service to help family members with administrative, navigational or organizational tasks.

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Led by Julian Alvarez, CEO, Logixboard provides a web-based end-to-end customer engagement platform for freight forwarders to give real-time visibility to their customers. Existing customers, like Transborder SAS, have processed millions of dollars in shipments using Logixboard.

With the new financing, the company will accelerate its vision of becoming the digital system of engagement for the global freight forwarding industry, automating quote and booking processes, deriving data insights, and building data integrations to other critical systems across the industry.

Logixboard, a recent graduate of Techstars, has offices in Bogota, Colombia.

Source. FinSMEs, October 22, 2019

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Loadsmart Raises $19M in Funding

Loadsmart, a Chicago, IL- and NYC-based digital freight technology company, raised $19m in funding.

Backers included Ports America, Maersk Growth, Chromo Invest and Connor Capital SB.

This latest round follows Loadsmart’s series A round in late 2018, bringing total funding to date to $53.4m.

The company intends to use the funds for its new Smart Drayage initiative.

Co-founded by Ricardo Salgado, CEO, and Felipe Capella, chief product officer, Loadsmart is a digital freight platform that specializes in truckload and intermodal shipping. The company is leveraging data and machine learning to build artificial intelligence processes into the complex freight cycle, allowing shippers to book a truck in seconds and providing instant and targeted loads to carriers.

The announcement comes together with the release of Loadsmart Drayage Instant Booking. The new service is available via the company’s website and enables small and medium-sized shippers to book a drayage truck in seconds.

For enterprise accounts Loadsmart offers an API integrated solution.

Source. FinSMEs, September 6, 2019

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Anvyl, looking to help D2C brands manage their supply chain, raises $9.3M

D2C brands face an interesting challenge. While they’ve eliminated much of the hassle of a physical storefront, they must still deal with all the complications involved in managing inventory and manufacturing and shipping a physical product to suppliers.

Anvyl, with a fresh $9.3 million in Series A funding, is looking to jump in and make a difference for those brands. The company, co-founded by chief executive Rodney Manzo, is today announcing the raise, led by Redpoint Ventures, with participation from existing investors First Round Capital and Company Ventures. Angel investors Kevin Ryan (MongoDB and DoubleClick), Ben Kaufman (Quirky and Camp) and Dan Rose (Facebook) also participated in the round.

Manzo hails from Apple, where with $300 million in spend to manage logistics and supply chain he was still operating in an Excel spreadsheet. He then went to Harry’s, where he shaved $10 million in cash burn in his first month. He says himself that sourcing, procurement and logistics are in his DNA.

Which brings us to Anvyl. Anvyl looks at every step in the logistics process, from manufacture to arrival at the supplier, and visualizes that migration in an easy-to-understand UI.

The difference between Anvyl and other supply chain logistics companies, such as Flexport, is that Anvyl goes all the way to the very beginning of the supply chain: the factories. The company partners with factories to set up cameras and sensors that let brands see their product actually being built.

“When I was at Apple, I traveled for two years at least once a month to China and Japan just to oversee production,” said Manzo. “To oversee production, you essentially have to be boots on the ground and eyes in the factory. None of our brands have traveled to a factory.”

On the other end of the supply chain, Anvyl lets brands manage suppliers, find new suppliers, submit RFQs, see cost breakdowns and accept quotes.

The company also looks at each step in between, including trucks, trains, boats and planes so that brands can see, in real time, their products go from being manufactured to delivery.

Anvyl charges brands a monthly fee using a typical SaaS model. On the other end, Anvyl takes a “tiny percentage” of goods being produced within the Anvyl marketplace. The company declined to share actual numbers around pricing.

This latest round brings Anvyl’s total funding to $11.8 million. The company plans to use the funding toward hiring in engineering and marketing, and grow its consumer goods customer base.

Source. Jordan Crook, TechCrunch, July 10, 2019

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Waresix hauls in $14.5M to advance its push to digitize logistics in Indonesia

Waresix, one of a handful of startups aiming to modernize logistics in Indonesia — the world’s fourth most populous country — has pulled in $14.5 million to grow its 18-month-old business.

This new investment, Waresix’s Series A, is led by EV Growth — the growth-stage fund co-run by East Ventures — with participation from SMDV — the investment arm of Indonesia corporation Sinar Mas — and Singapore’s Jungle Ventures . The startup previously raised $1.6 million last year from East Ventures, SMDV and Monk’s Hill Ventures. It closed a seed round in early 2018.

Waresix is aiming to digitize logistics, the business of moving goods from A to B, which it believes is worth a total of $240 billion in Indonesia.

A large part of that is down to the country’s geography. The archipelago officially has more than 17,000 islands, but there are five main ones. That necessitates a lot of challenges for logistics, which are said to account for 25-30% of GDP — a figure that is typically below 5% in Western markets — while Indonesia barely scraped the top 50 rankings in World Bank’s Logistics Performance Index.

But, as Southeast Asia’s largest economy and the key market for digital growth in the region, that makes this an attractive problem to solve… or, rather, attractive industry to modernize.

Like others in its space worldwide — which include Chinese unicorn Manbang and BlackBuck in India — Waresix is focused on optimizing logistics by making the process more transparent for clients and more efficient for haulage companies and truckers. That includes removing the chain of “middle man” brokers, who add costs and reduce transparency, and provide a one-stop solution for transportation by land or sea, as well as cold storage and general cargo handling.

As of today, Waresix claims a fleet of more than 20,000 trucks and over 200 warehouse partners across Indonesia. The company said it plans to use this new capital to expand that coverage further. In particular, that’ll include additional land transport options and additional warehouse capacity in tier-two cities and more remote areas. That’s a push that founders Andree Susanto (CEO) and Edwin Wibowo (CFO) — who met at UC Berkeley in the U.S. — believe fits with Indonesia’s own $400 billion commitment to improve national infrastructure and transport.

It is also consistent with East Ventures, the long-standing early-stage VC, which has backed a pack of young companies aiming to inject internet smarts into traditional industries in Indonesia. Some of that portfolio includes Warung Pintar, which develops smart street vendor kiosks, Kedai Sayur, which is digitizing street vendors, and Fore Coffee, which draws inspiration from China’s digital-first brand Luckin Coffee, which recently listed in the U.S.

Now with EV Growth, which reached a final close of $200 million thanks to LPs that include SoftBank, East Ventures has the firepower to write larger checks that go beyond seed and pre-Series A deals, as it has done with Waresix.

But the company is far from alone in going after the logistics opportunity in Indonesia. Its rivals include Kargo, which was started by a former Uber Asia exec and is backed by Uber co-founder Travis Kalanick’s 10100 fund among others, and Ritase.

Ritase, which claims to be profitable, closed an $8.5 million Series A this week. It said it has 7,500 trucks and, on the client side, some 500 SMEs and a smattering of well-known global brands. Kargo has kept its metrics quiet, but it is a later arrival on the scene. The startup only came out of stealth in March of this year when it announced a $7.6 million funding round.

Source. TechCrunch, Jon Russell, July 5, 2019

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Nowports raises $5.3 million to become Latin America’s digital shipping answer to Flexport

Nowports, a developer of software and services to track freight shipments from ports to destinations across Latin America, has aims to become the regional answer to Flexport’s billion-dollar digital shipping business.

Almost 54 million containers are imported and exported from Latin America each year, and nearly half of them are either delayed or lost due to mismanagement.

Nowports is pitching shippers on its digital management software to keep track of each container, and has signed on a number of leading venture capital firms to fulfill its mission.

The Monterrey, Mexico-based company raised $5.3 million in its seed round of financing. The round was led by Base10 and Monashees, with participation from Y Combinator and additional investors like Broadhaven, Soma Capital, Partech, Tekton and Paul Buchheit.

“In Nowports we saw a very strong combination: well prepared and ambitious team using technology to help thousands of customers to improve their importing and exporting processes. By adding efficiency, reliability, and transparency to change a multi-billion dollar industry, Nowports has been able to attract many clients that saw significant improvements in their daily routines by using the solution” said Caio Bolognesi, general partner from Monashees, in a statement.

The company said it would use the money to expand into new markets, grow its team and integrate with more companies involved in the (very fragmented) Latin American logistics industry. It’s a market that needs a range of better logistics technologies.

“Even though over 90% of the world’s trade is carried by sea, the most cost-effective way to move goods en masse, there has yet to be a solution that’s able to connect suppliers, customs brokers, carriers and transportation companies to provide an efficient and reliable service,” said Maximiliano Casal, founder and chief executive of Nowports, in a statement. “This is why we launched Nowports, combining our 10 years of industry expertise to fill this void and are currently working with over 40 customers in the region and growing.”

The company now has offices in Chile and Uruguay, and is planning to expand to Brazil, Colombia and Peru.

“With platforms, algorithms with AI and integrations, our platform allows companies to take control of their shipments and plan and predict the best timing to move the freight based on the needs of their own company,” said Alfonso De Los Rios, founder and CTO of Nowports.

As the company looks to expand, it has a strategic road map it can follow in the growth of Flexport, the Silicon Valley startup that has become a billion-dollar business by applying technology to the outdated shipping industry.

The two co-founders of Nowports met at a program at Stanford University, with De Los Rios hailing from a family with deep ties to the shipping industry. He and Casal linked up and the two began plotting a way to make the deeply inefficient industry more modern and transparent. To familiarize himself with the market for which he’d be developing a technology, Casal worked in a freight forwarder in Kansas City that had been operating for more than 30 years.

In all, freight providers are getting paid nearly $40 billion per year to move freight into Latin America.

“Alfonso and Max are the ideal founders we look to invest in as they are industry experts and passionate about evolving the industry using technology and automation,” said Adeyemi Ajao, general partner from Base10. “We are proud to be investors in Nowports alongside our friends at Monashees and look forward to watching the company’s continued growth.”

Source. Techcrunch, Jonathan Schreiber,  June 20, 2019

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BlackBuck raises $150 million to digitize freight and logistics across India

By Manish Singh

India’s trucking system has a big inefficiency problem that continues to drag the economy. BlackBuck, one of the handful of logistics startups that is trying to overhaul this system, just raised $150 million in a Series D round to further pursue its mission.

The new round was led by Goldman Sachs Investment Partners and Accel at a valuation just shy of $1 billion, according to a person familiar with the matter. Wellington, Sequoia Capital, B Capital, Light Street and existing investors Sands Capital and World Bank’s investment arm International Finance Corporation also participated in the round.

The four-year-old B2B startup, which connects businesses with truck owners and freight operators, has raised about $230 million in equity financing and another $100 million in debt financing to date, CEO Rajesh Yabaji told TechCrunch in an interview.

Yabaji said the startup will use the fresh capital to expand and improve its technology stack that enables truck drivers to find more work, and grow its fleet of driver partners. As of today, BlackBuck has 300,000 trucks on its platform and about 10,000 clients, including big names such as soft drinks manufacturer Coca-Cola, consumer goods giant Unilever and automotive conglomerate Tata .

BlackBuck has developed a simplified app for truck drivers in India, who are typically not very literate, to help them accept work and easily navigate to their destination using Google Maps. On the client side, businesses can fire up a similar app to place orders. Recently it also tied up with insurance company Acko to cover all the trucks on its network.

As things work at the moment, truck drivers in India often struggle to find any work on their way back from a drop. Yabaji says BlackBuck enables them to find 25% to 30% more work opportunities. The startup takes between 15% to 20% of that, which is how it makes money.

India’s logistics market, valued at $160 billion, has attracted major VC funds in recent years. Delhivery, a supply chain startup, has raised north of $670 million from SoftBank and Tiger Global among others. Rivigo, a startup that rotates drivers to improve efficiency, has raised north of $215 million from SAIF Partners and Warburg Pincus.

It’s a capital-heavy business. BlackBuck, which employs about 2,000 people, generated $135.5 million in revenue at a loss of $17 million in fiscal year 2018, according to regulatory filings. Yabaji says the startup aims to aggressively grow its business, so profitability is not something it is hoping to go after in the immediate future.

“Given the market we are in today, in terms of private capital being available, we do not have to do IPO for a really long time. It is all about optimizing for the objective,” he said.

BlackBuck said it will also give about 200 of its employees an option to liquidate up to 25% of their vested shareholding in the company at the current price.

Source. TechCrunch, Manish Singh, May 1, 2019

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GV-backed KeepTruckin nabs $149M at $1.25B valuation

By Kate Clark

KeepTruckin,  a developer of hardware and software that helps truck drivers manage their vehicles and cargo, has raised $149 million in Series D funding. Greenoaks Capital has led the round, with participation from existing backers GV, IVP, Index Ventures and Scale Venture Partners .

The round values the business at $1.25 billion, according to KeepTruckin co-founder and chief executive officer Shoaib Makani.

Since it was founded in 2013, KeepTruckin has accumulated 55,000 unique customers, deploying its software in hundreds of thousands of vehicles. The San Francisco-headquartered company will use the latest investment to double its employee headcount to 2,000 in the next 12 to 18 months.

“Our technology really improves the life of the driver,” Makani told TechCrunch. “These are real people doing work that keeps our economy moving. Trucking is really the foundation of the American economy. More than 70 percent of all freight is moved over the road in a truck. This is how we eat, consume and produce; without it, our economy wouldn’t thrive.”

The Series D financing brings KeepTruckin’s total raised to $228 million, including a $50 million Series C that closed in March 2018.

KeepTruckin’s software is intended to bring the antiquated trucking industry into the digital age. Its platform provides electronic logs and fleet management tools, including GPS tracking and driver performance monitoring for fleet managers and dispatchers to track and communicate with their drivers.

“We are competing against paper and pencil,” Makani explained.

Makani left Khosla Ventures, where he had been an investor in early-stage consumer and enterprise companies since 2011, in 2013 to build KeepTruckin. At the time, the beginnings of a new sector focused on tech-enabled logistics was beginning to emerge. Since then, several companies have launched and scaled with similar focuses.

There’s Convoy in Seattle, for example, which also operates a network of connected-trucks. Uber Freight, the logistics and supply chain management business inside Uber. And Huochebang, a Chinese mobile app dubbed the “Uber-for-Trucks.”

“Trucking is forecasted to be a $1 trillion industry by 2024 and is the backbone of the global economy, yet has been underserved by technology but change is coming and KeepTruckin is at the leading edge,” Greenoaks managing partner Neil Mehta said in a statement. “KeepTruckin is building the technology that trucking companies need to compete in the modern economy. The network that KeepTruckin has built will enable it to change the way freight is moved on our roads.”

Source. Techcrunch, Kate Clark, April 23, 2019

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Locus Robotics Raises $26M in Series C Funding

Locus Robotics, a Wilmington, Mass.-based market leader in autonomous mobile robots (AMR) for fulfillment warehouses, raised $26M in Series C funding.

Backers included Zebra Ventures, the strategic investment arm of Zebra Technologies, and Scale Venture Partners.

The company, which has raised more than $66m in total funding since launch, will use the proceeds to scale production of its multi-bot solution for warehouse fulfillment, as well as expand its sales and marketing efforts, both in North America, and internationally.

Led by Rick Faulk, CEO, Locus Robotics provides a multi-robot solution that enables warehouse operators to achieve efficient fulfillment operations while simultaneously managing both labor costs and fluctuating order volume.

Customers include DHL, GEODIS, Port Logistics Group, Verst Logistics, Radial, and others.

In addition to Zebra Ventures’ financial investment, Zebra Technologies is working with Locus to integrate technologies to bring innovative solutions to market. Locus recently added an accessory power port to their autonomous mobile robot, the LocusBot, which features a Zebra printer integrated onto its robotic platform, and showcased a Zebra wireless handheld scanner integrated with Locus’s new putaway functionality.

Source. FinSMEs, Staff, April 22, 2019

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Are you a Canadian startup that needs to grow or scale? Give us a call! One of our representatives would love to explain how we vertically design, and then systematically layer each of our communication platforms to effectively reach niche target audiences for our clients. WC offers a unique synergistic approach to effectively communicate our client's message to their target audience.

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Freight Startup Flexport Hits $3.2 Billion Valuation after $1 Billion Investment Led By Softbank

By Alex Konrad

His startup operates its own 747 aircraft and employs 1,066 people across 11 offices and four warehouses. He's tackling a market he calls “as ancient as mankind.” So when Flexport CEO Ryan Petersen decided to raise venture capital to pour more rocket fuel on his freight-forwarding company’s growth, it’s no surprise he turned to the fund best-known in Silicon Valley for writing massive checks: SoftBank.

Flexport, a software-focused freight forwarder that helps businesses transport their goods to their point of sale, announced a $1 billion funding round led by SoftBank’s Vision Fund on Thursday, with existing investors Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express all participating. The investment, an all-primary transaction (meaning early investors weren't selling their shares), values the San Francisco-based company at $3.2 billion, according to a source with knowledge of its terms.

As part of the capital injection, Vision Fund managing partner Michael Ronen will join Flexport’s board and director Ed Shrager comes on as a board observer. Petersen – who retains majority control of the company – will also appoint an independent board member to join Founders Fund’s Trae Stephens.

The investment comes as Flexport continues to grow its business at a clip atypical for startups at its scale. It brought in revenue of $441 million for 2018, a previously unreported total that represents annual growth of 95%.

SoftBank’s big bet on Flexport caps a two-year off-and-on courtship that heated up after Petersen read SoftBank founder Masayoshi Son’s 300-year plan unveiled in 2017. Both founders shared an ambition to use technology to connect people through an “information revolution,” Petersen says. And both speak in sweeping time horizons that can sound prophetic — or hubristic. “The audacity to have a 300 year vision, it just resonated with me,” says Petersen, who says one of the company's core values is to "play the long game." "We are an ancient industry; global trade is as ancient as mankind. All great industries are based on trade – and civilizations fall apart when they turn to plunder. We want to advance trade forward for the next few hundred years.”

Choosing SoftBank as a lead investor, however, isn’t without controversy. Much of the Vision Fund’s approximately $100 billion in capital comes from Saudi Arabia, which has faced heightened scrutiny since the murder of journalist Jamal Khashoggi in October 2018. Son recently said it was “too early” to decide whether SoftBank would work with Saudi Arabia for its next fund. Asked whether such a connection gave him pause, Petersen says, “we gave this a lot of thought,” adding that Flexport spent time with the Vision Fund in both the U.S. and Japan. They decided they could live with it. “We found that we were aligned in our vision of how technology could create a better, more interconnected world.”

Today, that scale includes a network of 10,000 import and export experts and customers who spend millions – some more than $10 million per year – for Flexport to manage their supply chains through a combination of software, local experts and physical assets like its warehouses. Tracking and handling freight is a huge business globally, as much as several trillion dollars, Flexport estimates, with at least 5,900 freight forwarders operating in the U.S. Many depend on experts with decades of expertise, who use email, phone calls and spreadsheets to get the job done. “Of the top 100 freight forwarders, we are the only one founded after Netscape,” Petersen quips.

Modernizing that process with technology helped Flexport gain acceptance, and then participate, in startup accelerator Y Combinator in 2014. While many startups were following Marc Andreessen’s battle cry to Silicon Valley from 2011, that software would eat the world, only Petersen wanted to apply that mantra to the deeply unsexy world of logistics. It wasn’t totally out of the blue. He’d worked on multiple projects in the space in the past, including his brother David’s business that imported medical bathtubs from China. “He was clearly obsessed with the import-export business,” says Alexis Ohanian, the Reddit co-founder and former YC partner who also invested in the startup through his VC firm Initialized Capital.

Flexport now operates its own dedicated 747 plane for air freight.Flexport

If a company agrees to a trial to manage at least 10 cargo loads through Flexport, Petersen thinks he can prove the company’s value, with Flexport’s software helping optimize each route to prioritize speed, reliability, cost or a combination of the three. That’s how Flexport started to work with sound system maker Sonos, which tested Flexport with one lane of its business, its China to Australia route, in early 2016. Now it’s one of four main logistics partners Sonos uses globally, alongside two multi-billion-dollar-revenue freight forwarding giants and UPS. Sonos was initially skeptical of trusting a startup, says Sonos global operations leader Patrick Stuut. “They’ve showed their value over time,” he says. “My advice is to give them a chance.”

But at other customers, Flexport’s youth is still on display. One of its largest export customers is Georgia-Pacific, the paper company that accounts for the bulk of the freight processed by parent conglomerate Koch Industries. Georgia-Pacific now uses Flexport to send finished product from Uruguay to Latin America, the Middle East and parts of India, and works with two traditional freight forwarders elsewhere. The startup still has a long way to go to work out kinks at such a scale, and needs to add more compliance and international law expertise in markets like European ports over time, says Georgia-Pacific supply chain director Carter Noland.

Add that to a shopping list of additions and improvements Flexport is considering with its $1 billion in new cash. The company plans to hire more engineers, including out of a new second technical office in Chicago, as well as hire more local experts in its global markets. Flexport will also continue to invest in physical assets such as additional warehouses; it’s considered expanding from one plane to more of a fleet. Then there are ancillary businesses, like Flexport Capital, which offers inventory loans to its customers, and products it doesn’t yet offer, like analytics tools for studying and making predictions based on a customer’s shipping patterns.

For SoftBank, Flexport represents a key link in a growing network of logistics-focused investments and subsidiaries that range from warehouse assets, Uber’s automobile and delivery needs to driverless cars and Boston Dynamics’ robots. Add it all up, and it looks a lot like SoftBank assembling an Amazon rival. Ronen, the investor who led SoftBank’s investment, says such thinking is on the right track. “I remember I was in New York City trying to buy a car, and the dealer had no idea where the car is. Maybe they get an email that it’s reached the dock and might show up at the lot eventually. And with Amazon, you can order paper towels and see where they are until they arrive in two hours,” Ronen says. “We should be able to, outside the Amazon ecosystem, get goods delivered to us much quicker and at lower cost.”

While Flexport grows, the company also plans to expand the efforts of its non-profit arm, Flexport.org. That group, which Petersen hasn’t discussed in detail before, offers a carbon calculator to customers to see the environmental impact of their shipments, as well as the opportunity to offset their carbon footprints by donating money to projects and non-governmental organizations vetted by Flexport. The company also offers its software to non-governmental organizations to track donated goods, such as bottled water or work gloves for recovery sites, for free. More recently, Flexport.org expanded to encourage its own clients to donate goods in shipments that have extra space, subsidizing or waiving the cost of shipment. Flexport.org sent 487 cargo shipments in 2018, saving non-profits an average of more than 20% in savings and reducing waste by 3.9 million pounds, according to director Susy Schöneberg.

“They have the opportunity to be a backbone in these scenarios,” says Ashton Kutcher, the actor and investor who backed Flexport and helped it pilot that project in Iowa. “The larger their network becomes, the more efficient they can be.”

If it sounds like a lot for one startup to tackle – that’s because it is. With this funding, Flexport not only faces additional financial pressure – investors will expect it to grow 5x or 10x larger than it is today – as well as execution challenges of doing too much too fast. And that’s without Flexport expanding into blockchain (Petersen says he’s waiting for a shipping standard to emerge, or fail to do so, before he’d build one himself) or making acquisitions should partners or fellow startups stumble and look to sell.

Cue SoftBank, which has emerged as the natural choice for such a large check and similarly outsized ambitions.  Petersen tells the story of meeting Son, and Son’s lesson for him about the early days of Alibaba, the Chinese tech giant in which he was an early investor. Son and founder Jack Ma agreed Alibaba would grow far faster if it didn’t charge transaction fees for years and focused on scale. The implication for Flexport – which Petersen notes does charge for its freight, but offers its software for free – to focus on building its global network at all costs was clear.

“That was an interesting story to hear first-hand,” says Peterson, who spent time with the Japanese investor at his homes near San Francisco and in Tokyo. “Plus I just really enjoyed negotiating a billion-dollar deal while wearing slippers.”

Source. Forbes, Alex Konrad, February 21, 2019