Tech startups seeking to upend the business of booking freight shipments for trucks is drawing new funding from various investors, reports Wall Street Journal.
Transfix is a New Yorok based mobile app developer that has emerged as the leader in new fund raising – $22 million Series B funding, led by VC firm New Enterprise Associates. The new funds will value Transfix at more than $75 million.
The company is one of several startups that have received significant venture capital funding as they look to challenge established, old-line freight brokerages.
Companies such as Los Angeles based Cargomatic Inc., San Francisco’s Trucker Path Inc., and Austin’s uShip offer smartphone apps that connect companies looking to ship goods to truck drivers. Many describe themselves as the “Uber of trucking”, referring to the Ubernization of industries as pioneered by Uber taxis.
Traditionally, truckers relied on lists of shipments posted at truck stops known as “load boards” and networks of freight brokers reached by phone to find shipments. More recently, load boards have migrated online.
Mobile apps are the latest development in the shipping field, and tech investors have jumped on board. For instance, Convoy has raised $16 million from the founders of Amazon, Salesforce, eBay and Uber.
It’s not just as simple as, you pick something up, drop it off, and the driver leaves. – Tommy Barnes, project44.
Mobile apps for trucking make sense for local trucking, where deliveries are short and relatively routine, but that they would need larger scale to compete with established brokerages for national business. Large scale brokers are not overly concerned about the Uber for trucking models. It doesn’t have the reach to disrupt the industry just yet.
Models such as these are not common yet in Southeast Asia. Truck companies in Thailand for example, are still operating in a very local, offline strategies. There has not been a demand for instant freight services, although that may be subject to change once the logistics industry becomes more technologically dependent.
A version of this appeared in Wall Street Journal on July 25. Read the full version here.