logistics
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India’s Locus raises $22 million to expand its logistics management business
Locus, an Indian startup that uses AI to help businesses map out their logistics, has raised $22 million in Series B funding to expand its operations in international markets.
The financing round for the four-year-old startup was led by Falcon Edge Capital and Tiger Global. Existing investors Exfinity Venture Partners and Blume Ventures also participated in the round. The startup has raised $29 million to date, Nishith Rastogi, co-founder and CEO of Locus, told TechCrunch in an interview.
Locus works with companies that operate in FMCG, logistics and e-commerce spaces. Some of its clients include Tata Group companies, Myntra, BigBasket, Lenskart and Bluedart. It helps these clients automate their logistics workload — tasks such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination — that have traditionally required intensive human labor.
“Say a Lenskart representative is visiting a house or an office to offer an eye checkup, and suddenly two more people there are interested in getting their eyes checked. The representative could attend these two new potential clients, or wrap things up with the first client and take care of his or her next appointment,” said Rastogi.
Locus looks at a client’s past data, identifies patterns and automates these kind of decisions on a large scale. In an example shared earlier with TechCrunch, Rastogi talked about how Locus had built a scanner for e-commerce companies for measuring products.
Rastogi said he will use the fresh capital to develop products and expand Locus in Southeast Asian and North American markets. The startup says half of its 110-person workforce is outside of India. Half of the IP it has built and the revenue it generates comes from its team outside of India.
He said the startup has spent the recent quarters studying these international markets, and has secured some anchor clients to expand the business. Locus is operationally profitable already and any additional capital goes into expanding its business, he added.
The logistics market in India has long been riddled with challenges. A growing number of startups, including BlackBuck — which raised $150 million last week — have emerged in recent years to tackle these problems.
The new funding also illustrates Tiger Global’s new strategy for the Indian market. The VC fund, which has invested in B2C businesses Flipkart and Ola in India, has made a number of investments in B2B startups in recent months. Last month, it invested $90 million in agritech supply chain startup Ninjacart, and weeks later, it gave cloud-based solutions provider Zenoti $50 million. It also participated in customer marketing service ClearTap’s $26 million round.
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Grocery startup BigBasket becomes India’s newest unicorn with new $150M investment
India has a new unicorn after BigBasket, a startup that delivers groceries and perishables across the country, raised $150 million for its fight against rivals Walmart’s Flipkart, Amazon and hyperlocal startups Swiggy and Dunzo.
The new financing round — a Series F — was led by Mirae Asset-Naver Asia Growth Fund, the U.K.’s CDC Group and Alibaba, BigBasket said on Monday. The closing of the round has officially helped the seven-year-old startup surpass $1 billion valuation, co-founder Vipul Parekh, who heads marketing and finances for the company, told TechCrunch in an interview. Chinese giant Alibaba, which also led the Series E round in BigBasket last year, is the largest investor in the company, with about 30% stake, a person familiar with the matter said.
The company, which offers more than 20,000 products from 1,000 brands in more than two dozen cities, will deploy the fresh capital into expanding its supply-chain network, adding more cold storage centers and distribution centers to serve customers faster, Parekh said. The company also plans to add about 3,000 vending machines that offer daily eatable items, such as vegetables, snacks and cold drinks in residential apartments and offices by next month, he added.
Infusion of $150 million for BigBasket, which raised $300 million last year, comes at a time when both Walmart’s Flipkart and Amazon are increasingly expanding their grocery businesses in India.
Amazon Retail India, which operates Amazon Pantry and Prime Now services and has a presence in mire than 100 cities, is reportedly planning to expand its business in India. Flipkart Group CEO Kalyan Krishnamurthy said in an interview with the Economic Times last month that the e-commerce giant may pilot a fresh foods business soon. Last week, Flipkart was said to be in talks to acquire grocery chain Namdhari’s Fresh.
Parekh largely brushed off the challenge his company faces from Flipkart and Amazon at this stage, saying that “it is a very large market, and it is unlikely to be dominated by one single company for the simple reason of its complex nature.” Flipkart and Amazon may eventually get serious about this space, but so far their play with groceries is mostly an additional differentiation checkpoint, he said.
“The success in this business requires having the ability to build and manage a very complex supply chain across multiple categories such as vegetables, meat and beauty products among others. Our focus has been on building the supply chain, and also ensuring that we are able to deliver a very large assortment of products to consumers,” he added. He said BigBasket today offers the largest catalog and fastest delivery among any of its rivals.
Besides, BigBasket, which is increasingly growing its subscription business to supply milk and other daily eatables, is also inching closer to becoming financially stronger. Parekh said BigBasket expects to become operationally profitable in six to eight months. “The idea is that business by itself does not consume cash. If we use cash, it will be for investment in new businesses or scaling of existing businesses,” he said.
India’s retail market, valued at mire than $900 billion, is increasingly attracting the attention of VC funds. Since 2014, online retailers alone have participated in more than 163 financing rounds, clocking over $1.38 billion, analytics firm Tracxn told TechCrunch. More than 882 players are operational in the market, the firm said.
The challenge for BigBasket remains fighting a growing army of rivals, including hyperlocal delivery startups including Grofers, which raised $60 million earlier this year, unicorn Swiggy and Google-backed Dunzo, which is increasingly becoming a verb in urban Indian cities.
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Acquisitions, more than IPOs, will create Africa’s early startup successes
Africa has made its global IPO debut. Pan-African e-commerce company Jumia—a $1 billion-valued company—began trading live on the NYSE last week.
The stock offering made Jumia the first upstart operating in Africa to list on a major global exchange.
This raises expectations for unicorns and IPOs to create the continent’s first wave of startup moguls. But unlike other markets, big public listings and nine-figure valuations could remain rare in Africa.
The rise of venture arms and startup acquisitions will factor more prominently than IPOs in creating Africa’s early startup successes.
I’ll break down why. First, a quick briefer.
Primer on African tech
Not everyone may be aware, but yes, Africa has a booming tech scene. When measured by monetary values, it’s minuscule by Shenzen or Silicon Valley standards.
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Logistics startup Zencargo raises $20M to take on the antiquated business of freight forwarding
Move over, Flexport. There is another player looking to make waves in the huge and messy business of freight logistics. Zencargo — a London startup that has built a platform that uses machine learning and other new technology to rethink how large shipping companies and their customers manage and move cargo, or freight forwarding as it’s known in the industry — has closed a Series A round of funding of about $19 million.
Zencargo’s co-founder and head of growth Richard Fattal said in an interview that the new funds will be used to continue building its software, specifically to develop more tools for the manufacturers and others who use its platform to predict and manage how cargo is moved around the world.
The Series A brings the total raised by Zencargo to $20 million. This latest round was led by HV Holtzbrinck Ventures . Tom Stafford, managing partner at DST Global; Pentland Ventures; and previous investors Samos, LocalGlobe and Picus Capital also participated in the round.
Zencargo is not disclosing its valuation, nor its current revenues, but Fattal said that in the last 12 months it has seen its growth grow six times over. The company (for now) also does not explicitly name clients, but Fattal notes that they include large e-commerce companies, retailers and manufacturers, including several of the largest businesses in Europe. (One of them at least appears to be Amazon: Zencargo provides integrated services to ship goods to Amazon fulfillment centers.)
Shipping — be it by land, air or sea — is one of the cornerstones of the global economy. While we are increasingly hearing a mantra to “buy local,” the reality of how the mass-market world of trade works is that components for things are not often made in the same place where the ultimate item is assembled, and our on-demand digital culture has created an expectation and competitive market for more than what we can source in our backyards.
For companies like Zencargo, that creates a two-fold opportunity: to ship finished goods — be it clothes, food or anything — to meet those consumer demands wherever they are; and to ship components for those goods — be it electronics, textiles or flour — to produce those goods elsewhere, wherever that business happens to be.
Ironically, while we have seen a lot of technology applied to other aspects of the economics equation — we can browse an app anytime and anywhere to buy something, for example — the logistics of getting the basics to the right place are now only just catching up.
Alex Hersham, another of Zencargo’s co-founders who is also the CEO (the third co-founder is Jan Riethmayer, the CTO), estimates that there is some $1.1 trillion “left on the table” from all of the inefficiencies in the supply chain related to things not being in stock when needed, or overstocked, and other inventory mistakes.
Fattal notes that Zencargo is not only trying to replace things like physical paperwork, faxes and silos of information variously held by shipping companies and the businesses that use them — but the whole understanding and efficiency (or lack thereof) that underlies how everything moves, and in turn the kinds of businesses that can be built as a result.
“Global trade is an enormous market, one of the last to be disrupted by technology,” Fattal said. “We want not just to be a better freight forwarder but we want people to think differently about commerce. Given a choice, where is it best to situate a supplier? Or how much stock do I order? How do I move this cargo from one place to another? When you have a lot of variability in the supply chain, these are difficult tasks to manage, but by unlocking the data in the supply chain you can really change the whole decision making process.”
Zencargo is just getting started on that. Flexport, one of its biggest startup competitors, in February raised $1 billion at a $3.2 billion valuation led by SoftBank to double down on its own freight forwarding business, platform and operations. But as Christian Saller, a partner at HV Holtzbrinck Ventures describes it, there is still a lot of opportunity out there and room for more than one disruptor.
“It’s such a big market that is so broken,” he said. “Right now it’s not about winner-take-all.”
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Hello Alfred launches new platform to reach more buildings and improve accessibility
Hello Alfred — the startup that assigns in-home assistants to take care of your recurring chores and tasks — has announced the launch of a new service tier that will provide more properties and residents with access to the company’s underlying technology.
The company, which won the Startup Battlefield competition at our 2014 Disrupt event in San Francisco, looks to unlock valuable time for users by handling the long list of small routine items that add up over the course of a week and still require human oversight.
Hello Alfred partners with building owners to provide residents with dedicated home managers that assist with various errands and on-request services, such as apartment cleaning, grocery delivery, laundry services, prescription refills and more. Users have a direct line of communication with the company’s hospitality team through Hello Alfred’s mobile app, where they can manage tasks and set recurring appointments.
The new platform, “Powered by Alfred,” acts as a fairly similar but more accessible alternative to the company’s current offering. Residents in buildings equipped with “Powered by Alfred” are given access to all of the company’s solutions with the exception of the weekly visits from dedicated home managers currently included in the existing service. By excluding the dedicated in-home service, Hello Alfred is able to offer its new service tier at a lower price point and integrate with more buildings faster.
Property owners using “Powered by Alfred” can customize packages to include the services that best fit the needs of their residents and can upgrade or change service levels at any time. Both residents and building owners using the new platform are also given more control and direct access to Hello Alfred’s proprietary technology, allowing users to control functions that normally fall under the purview of the company’s dedicated home managers.
Additionally, with the launch of the new offering, Hello Alfred will be consolidating its various solutions under one central app, where residents and building managers can handle all inquiries, appointments and payments.
Hello Alfred’s new service tier, “Powered by Alfred,” provides a single, shared access point for resident and property owners to manage inquiries and drive property performance / Hello Alfred Press Kit
The launch of “Powered by Alfred” seems to be a natural evolution for the company, which seeks to make its offering more accessible to all residents of all backgrounds.
Hello Alfred previously employed a consumer-facing business model, in which customers would pay a monthly subscription fee for the array of in-home services and access to the company’s team of hospitality specialists, referred to as Alfreds.
However, around the time of the startup’s Series B round, Hello Alfred adopted the model of partnering directly with property owners to offer its services complimentary to residents. The partnership structure was not only a more conducive model for scaling but also enabled the company to offer the same services to any resident in an Alfred-equipped building, regardless of socioeconomic status.
Hello Alfred quickly built up a sizeable backlog of property owners hoping to integrate the platform into their units, according to the company. However, the task of maintaining dedicated staffing for every unit in every location made it difficult for the Alfred team to satisfy its swelling demand, having to instead focus resources primarily on luxury properties.
With “Powered by Alfred” removing in-home management services, the company has been able to improve accessibility and better satisfy the market’s appetite for its services, now rolling out the offering to non-luxury buildings and properties that previously sat in its pipeline.
Behind the launch of the new platform — which the company has piloted over the course of several months — Hello Alfred has increased its market share by more than 50 percent, with its services now available in more than 150,000 residential properties.
“We want Alfred to be a utility. We want to make “help” a universal utility and make it something anyone can access,” Hello Alfred CEO and co-founder Marcela Sapone told TechCrunch. “We wanted to find a way where we could accelerate growth and get human-focused help into urban buildings to help most urban environments.”
The launch represents the latest step in Hello Alfred’s broader expansion plans, which appear to have ramped up in recent months. Hello Alfred is now active in 16 cities — including Houston, where the company plans to launch next week — with its new offering available across all of its active markets. The startup already boasts an impressive partnership roster that includes more than 20 of the largest property owners in the U.S., and the Alfred team expects its new offering to open up further opportunities for partnerships across different property classes and different stages of a resident’s life cycle.
“As WeWork transformed commercial real estate, Hello Alfred is transforming residential real estate, and redefining what it means to live in a city today,” said Sapone. “This business expansion allows us to not only satisfy increasing demand for our service, but to connect every part of the resident experience — from the moment you sign your lease, until the moment you move to another Hello Alfred building.”
To date, the company has raised just over $63.5 million in venture capital, according to data from PitchBook, from prestigious investment brands that include New Enterprise Associates, Spark Capital, SV Angel, Moderne Ventures, Invesco and others.
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Our 9 favorite startups from Y Combinator W19 Demo Day 2
Heathcare kiosks, a home-cooked food marketplace, and a way for startups to earn interest on their funding topped our list of high-potential companies from Y Combinator’s Winter 2019 Demo Day 2. 88 startups launched on stage at the lauded accelerator, though some of the best skipped the stage as they’d already raised tons of money.
Be sure to check out our write-ups of all 85 startups from day 1 plus our top picks, as well as the full set from day 2. But now, after asking investors and conferring with the TechCrunch team, here are our 9 favorites from day 2.
Shef
Two months ago, California passed the first law in the country legalizing the sale of home cooked food. Shef creates a marketplace where home chefs can find nearby customers. Shef’s meals cost around $6.50 compared to $20 per meal for traditional food delivery, and the startup takes a 22 percent cut of every transaction. It’s been growing 50 percent week over week thanks to deals with large property management companies that offer the marketplace as a perk to their residents. Shef wants to be the Airbnb of home cooked food.
Why we picked Shef: Deregulation creates gold rush opportunities and Shef was quick to seize this one, getting started just days after the law passed. Food delivery is a massive megatrend but high costs make it unaffordable or a luxury for many. If a parent is already cooking meals for their whole family, it takes minimal effort to produce a few extra portions to sell to the neighbors at accessible rates.
Handle
This startup automates the collection process of unpaid construction invoices. Construction companies are often forced to pay for their own jobs when customers are late on payments. According to Handle, there are $104 billion in unpaid construction invoices every year. Handle launched six weeks ago and is currently collecting $22,800 in monthly revenue. The founders previously launched an Andreessen Horowitz-backed company called Tenfold.
Why we picked Handle: Construction might seem like an unsexy vertical, but it’s massive and rife with inefficiencies this startup tackles. Handle helps contractors demand payments, instantly file liens that ensure they’re compensated for work or materials, or exchange unpaid invoices for cash. Even modest fees could add up quickly given how much money moves through the industry. And there are surely secondary business models to explore using all the data Handle collects on the construction market.
Blueberry Medical
This pediatric telemedicine company provides medical care instantly to families. Blueberry provides constant contact, the ability to talk to a pediatrician 24/7 and at-home testing kits for a total of $15 per month. They’ve just completed a paid consumer pilot and say they were able to resolve 84 percent of issues without in-person care. They’ve partnered with insurance providers to reduce ER visits.
Why we picked Blueberry: Questionable emergency room visits are a nightmare for parents, a huge source of unnecessary costs, and a drain on resources for needy patients. Parents already spend so much time and money trying to keep their kids safe that this is a no-brainer subscription. And the urgent and emotional pull of pediatrics is a smart wedge into telemedicine for all demographics.
rct studio
Led by a team of YC alums behind Raven, an AI startup acquired by Baidu in 2017, rct studio is a creative studio for immersive and interactive film. The platform provides a real time “text to render “engine (so the text “A man sits on a sofa” would generate 3D imagery of a man sitting on a sofa) that supports mainstream 3D engines like Unity and Unreal, as well as a creative tool for film professionals to craft immersive and open-ended entertainment experiences called Morpheus Engine.
Why we picked rct studio: Netflix’s Bandersnatch was just the start of mainstream interactive film. With strong technology, an innovative application, and proven talent, rct could become a critical tool for creating this kind of media. And even if the tech falls short of producing polished media, it could be used for storyboards and mockups.
Interprime
Provides “Apple level” treasury services to startups. Startups are raising a lot of money with no way to manage it, says Interprime. They want to help these businesses by managing these big investments by helping them earn interest on their funding while retaining liquidity. They take a .25 percent advisory fee for all the investment they oversee. So far, they have $10 million in investment capital they are servicing.
Why we picked Interprime: The explosion of early stage startup funding evidenced by Y Combinator itself has created new banking opportunities. Silicon Valley Bank is ripe for competition and Interprime’s focus on startups could unlock new financial services. With Interprime’s YC affiliation, it has access to tons of potential customers.
Nabis
Nabis is tackling the cannabis shipping and logistics business, working with suppliers to ship out goods to retailers reliably. It’s illegal for FedEx to ship weed so Nabis has swooped in and is helping ship and connect while taking cuts of the proceeds, a price the suppliers are willing to pay due to their 98 percent on-time shipping record.
Why we picked Nabis: Quirky regulation creates efficiency gaps in the marijuana business where incumbents can’t participate since they’re not allowed to handle the flower. As more states legalize and cannabis finds its way into more products, moving goods from farm to processor to retailer could spawn a big market for Nabis with a legal moat. It’s already working with many top marijuana brands, and could sell them additional services around business intelligence and distribution.
WeatherCheck
This startup measures weather damage for insurance companies. WeatherCheck has secured $4.7 million in annual bookings in the five months since it launched to help insurance carriers reduce their overall claims expense. To use the service, insurers upload data about their properties. WeatherCheck then monitors the weather and sends notifications to insurance companies, if, for example, a property has been damaged by hail.
Why we picked WeatherCheck: Extreme weather is only getting worse due to climate change. With 10.7 million US properties impacted by hail damage in 2017, WeatherCheck has found a smart initial market from which to expand. It’s easy to imagine the startup working on flood, earthquake, tornado, and wildfire claims too. Insurance is a fierce market, and old-school providers could get a leg up with WeatherCheck’s tech.
Upsolve
Upsolve wants to help low-income individuals file for bankruptcy more easily. The non-profit service gets referral fees from pointing non low-income families to bankruptcy lawyers and is able to offer the service for free. The company says that medical bills, layoffs and predatory loans can leave low-income families in dire situations and that in the last 6 months, their non-profit has alleviated customers from $24 million in debt.
Why we picked Upsolve: Financial hardship is rampant. With the potential for another recession and automation threatening jobs, many families could be at risk for bankruptcy. But the process is so stigmatized that some people avoid it at all costs. Upsolve could democratize access to this financial strategy while inserting itself into a lucrative transaction type.
Pulse Active Stations Network
This startup makes health kiosks for India, meant to be installed in train stations. Co-founder Joginder Tanikella says that there are 600,000 preventable deaths in India as many in the region don’t get regular doctor checkups. “But everyone takes trains,” he says. Their in-station kiosk measures 21 health parameters. The company made $28,000 in revenue last month. Charging $1 per test, Tanikella says each machine pays for itself within 3 months. In the future, the kiosks will allow them to sell insurance and refer users to doctors.
Why we picked Pulse: Telemedicine can’t do everything, but plenty of people around the world can’t make it in to a full-fledged doctor’s office. Pulse creates a mid-point where hardware sensors can measure body fat, blood pressure, pulse, and bone strength to improve accuracy for diagnosing diabetes, osteoarthritis, cardiac problems, and more. Pulse’s companion app could spark additional revenue streams, and there’s clearly a much bigger market for this than just India.
Honorable Mentions
-Allo, a marketplace where parents can exchange babysitting and errand-running
-Shiok, a lab-grown shrimp substitute
-WithFriends, a subscription platform for small retail businesses
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More Y Combinator coverage from TechCrunch:
Additional reporting by Kate Clark, Lucas Matney, and Greg Kumparak
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DoorDash claims drivers made an average of at least $17.50/hour on deliveries in 2018
On-demand food delivery startup DoorDash has been under fire as of late for its practices around paying drivers. In an email to drivers today, obtained by TechCrunch, DoorDash said drivers received an average of $17.50 or more per hour on deliveries in 2018. That figure, of course, does not take into account cost of mileage, payroll taxes for 1099 independent contractors and other expenses.
Sage Wilson, an organizer at nonprofit labor group Working Washington, explained to TechCrunch how that $17.50 per hour figure works out to less than $6 per hour — not including tips, cost of expenses and taxes. That figure, he said, is “based on our review of actual weekly pay data from DoorDash drivers” and an estimate that about 30 percent of the total income comes from tips.
DoorDash currently offsets the amount it pays drivers with customer tips. DoorDash describes its payment structure as follows: $1 plus customer tip plus pay boost, which varies based on the complexity of order, distance to restaurants and other factors. It’s only when a customer doesn’t tip at all, which DoorDash told Fast Company happens about 15 percent of the time, that DoorDash is on the hook to pay the entire guaranteed amount.
In the email sent to drivers today, with “Listening to the Dasher community” in the subject line, DoorDash CEO Tony Xu notes the level of recent discussion pertaining to DoorDash’s pay model. He goes on to defend the company’s practices, saying “we continue to hear from many of you that the model works: you know how much you’ll receive in advance, you receive the guaranteed minimum even if the customer doesn’t tip…”
He does add, however, “But we’ve also heard from some who expressed confusion about how pay is calculated and what happens with tips.”
In the coming weeks, DoorDash said it will launch surveys and organize roundtables for drivers to share their thoughts and concerns. In the email, DoorDash provides a link for drivers to sign up to be included. From there, Xu said DoorDash will look over the feedback, report what it has learned and “what changes we plan to make in response.”
This current model was the result of “months of testing” and surveys of thousands of Dashers. I’ve reached out to DoorDash and will update this story if I hear back.
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Logistics startup Flexport just raised a SoftBank-led round at a whopping $3.2 billion valuation
Flexport, a 5.5-year-old, San Francisco-based full-service air and ocean freight forwarder, says it has raised $1 billion in fresh funding led by the SoftBank Vision Fund.
Earlier backers of the company, including Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express, all participated in the round, which reportedly pegs the company’s post-money valuation at $3.2 billion.
According to Forbes, which broke the news, Flexport generated revenue of $471 last year, up from $224.8 million in 2017, thanks in part to some customers who the company says spend more than $10 million a year at Flexport for its help in managing their supply chains.
The company is apparently moving so fast, it hasn’t had a chance to update its marketing materials. CEO Ryan Petersen tells Forbes the company now employs 1,066 people across 11 offices and four warehouses around the world. Its site states it has 600 employees.
Axios reported last week that Flexport was in talks to raise money in a deal led by SoftBank that would value the company in the $3 billion range.
It had previously raised $305 million across five rounds, including, most recently, in April 2018, according to Crunchbase.
Flexport competes with numerous other freight forwarding online marketplaces that are focused on price comparison, as well as helping their clients book and track shipments. But its goal, seemingly, is to compete more directly with heavyweights like DHL, FedEx and UPS. In late 2017, it said it was beginning to charter its own aircraft. Petersen tells Forbes that Flexport now has four warehouses around the world, too.
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Uber Freight co-founders and top dealmakers join logistics startup Turvo
Last year, Charlie Bergevin and Brian Cristol, co-founders of Uber’s trucking logistics business Uber Freight, heard Reid Hoffman say Turvo had some of the best technology he had ever seen. Frustrated with the direction Uber Freight had taken, they called up Turvo’s founder and chief executive officer Eric Gilmore.
It wasn’t long before offers were on the table and now they’ve joined Turvo full-time. Cristol as head of enterprise partnerships and Bergevin as an enterprise partnerships executive. Bin Chang, a founding engineer at Uber Freight, is joining Turvo, too, a move I’m told Cristol and Bergevin were unaware of until they’d already accepted roles at the venture-funded startup. Chang begins February 11.
“Brian and Charlie … have contributed so much to incubate this business and scale it to where we are today,” Uber Freight chief Lior Ron wrote in an internal email to employees shared with TechCrunch. “They were always on the forefront of exploration and innovation and were able to constantly push themselves, and all of us, to the next frontier.”
Cristol and Bergevin were Uber’s first B2B sales hires when they joined the ride-hailing firm in 2016. Tasked with finding product market fit for Uber’s final-mile businesses under the “Uber Everything” initiative, they began learning about the truckload transportation and logistics industry. That’s when they linked up with Curtis Chambers, Uber’s long-time director of engineering. Together, the trio pitched their idea for a logistics business unit within Uber to then CEO Travis Kalanick.
Turvo’s real-time logistics platformToday, Uber Freight has roughly 750 employees and $1 billion in revenue. While the loss of two of its key dealmakers, who established relationships with Uber Freight’s Fortune 1000 customers, is cause for concern, Cristol and Bergevin suggested the unit is a rocket ship waiting to take off.
“Uber Freight has by far the biggest market size and is by far the newest and it was made from scratch,” Bergevin told TechCrunch in reference to other Uber-branded businesses. “Sure we had the brand but with Uber Eats we had drivers, too, this was starting from scratch.”
So why are they leaving? The pair told TechCrunch they simply don’t feel like they are solving enough of the key issues plaguing the industry, particularly legacy systems. Uber Freight, for its part, focuses on freight brokerage, optimizing for top-line revenue. The business automates the backend operations that exist in transportation and truckload brokerage today, aggregating trucking fleets via the Uber Freight app and connecting drivers with shippers.
Turvo, on the other hand, works across the supply chain. The company, which has raised a total of $88.6 million at a $435 million valuation, according to PitchBook, helps shippers, brokers and carriers work together in real time using a software interface on their desktops and mobile phones. Turvo emerged from stealth two years ago with a $25 million Series A led by Activant Capital, with participation from Felicis Ventures, Upside Partnership, Slow Ventures and more. In November, the startup closed a Series B funding of $60 million led by Mubadala Ventures.
“Turvo’s platform is providing this solution to legacy logistics platforms and really maximizing all parts of the supply chain, not just pieces of it, which we were accustomed to at Uber,” Cristol told TechCrunch. “We were excited about how Turvo was innovating around the nucleus of logistics.”
Cristol and Bergevin officially began work at Turvo last week.
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The next big bet for former Uber CEO Travis Kalanick may be cloud kitchens — in China
Former Uber CEO Travis Kalanick may have been nudged out of one of the world’s most highly valuable private companies by investors frustrated over its troubled culture, but his moves remain of great interest given how far he’d driven the rideshare giant.
One such move, according to a new report in the South China Morning Post, looks to be to help foster the growing concept of cloud kitchens to China.
We’ve reached out to Kalanick for more information, but per the SCMP’s report, Kalanick is partnering with the former COO of the bike-sharing startup Ofo, Yanqi Zhang. Their apparent project involves Kalanick’s L.A.-based company, CloudKitchens, which enables restaurants to set up kitchens for the purposes of catering exclusively to customers ordering in, as that’s how many people are consuming restaurant food in increasing numbers. (More on the movement here.) The kitchens are established in underutilized real estate that Kalanick is snapping up through a holding company called City Storage Systems.
According to The Spoon, a food industry blog, the trend is beginning to gain momentum in particular regions, including India, where it says many restaurants struggle to afford the traditional restaurant model, which often involves paying top dollar for rent, as well covering wages for employees, from dishwashers to cooks to servers. Using so-called cloud kitchens enables these restaurateurs to share facilities with others, and to do away with much of their other overhead.
Some are even being promised more affordable equipment. For example, according to The Spoon, the restaurant review site Zomato, through its now two-year-old service called Zomato Infrastructure Services, aims to create kitchen “pods” that restaurants can rent, and it’s using data to identify recently closed restaurants that may be looking to offload their kitchen equipment for whatever they can get for it.
Shared kitchens have also been taking off in China, as notes the SCMP, which cites Beijing-based Panda Selected and Shanghai-based Jike Alliance as just two companies that Kalanick would be bumping up against.
Kalanick wasn’t the first here in the U.S. to spy the trend bubbling up, but he seems to be taking it as seriously as any entrepreneur. Last year, he spent $150 million to buy a controlling stake in City Storage Systems, the holding company of CloudKitchens, through a fund that he established around the same time, called the 10100 fund. The money was used to buy out most of the company’s earlier backers, including venture capitalist Chamath Palihapitiya, according to a report last year by Recode.
That same report said that Kalanick now has a controlling interest in City Storage Systems. It also said that serial entrepreneur Sky Dayton — who previously founded EarthLink, co-founded eCompanies and founded Boingo — is a co-founder.
City Storage Systems isn’t interested in on-demand kitchens alone, reportedly. The idea behind it is to buy distressed real estate, including parking lots, and repurpose it for a number of online-focused ventures.
While the China twist looks like a new development, it wouldn’t be a wholly surprising move. Having had to back out of China with Uber in 2016, Kalanick may be of a mind to jump into the country faster this time around, and with a local partner with whom he has a relationship. Indeed, Zhang spent two years as a regional manager for Uber in China before co-founding Ofo, which has since run into problems of its own.
We’ve also reached to Zhang for this story and hope to update it when we learn more.
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