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Zencargo raises $42M to expand its digital-first freight-forwarding platform internationally
While consumers and businesses continue to use their purchasing power to spin the wheels of the globalized economy, one of the companies that’s built a technology platform to help that economy operate more smoothly is announcing an investment to double down on growth.
Zencargo, which has built a digital platform to enable freight forwarding — the process by which companies organize and track the movements of items they are making and selling (and the components needed for those items) — has raised £30 million (about $42 million). Alex Hersham, the CEO who co-founded the company with Richard Fattal (CCO) and Jan Riethmayer, said that London-based Zencargo will be using the funding to open offices in the Netherlands, Hong Kong and the U.S.; to more than double its headcount to 350 from 150 today; and to begin to make moves into trade finance — a critical lever for facilitating the trading activities that are the bread and butter of Zencargo’s business.
The Series B is being led by Digital+ Partners, with HV Capital, which led its previous round, also participating. Zencargo is not disclosing its valuation, but the company — which provides services both to companies and distributors like Amazon to ship goods to its fulfillment centers, and brands like Vivienne Westwood, Swoon Furniture, and Soho Home — said that it is on track to make £100 million in revenues this year, and £200 million in 2022.
That is against the backdrop of some major world events that have both proven to be challenges as well as opportunities for the startup.
Brexit in the U.K. has created quite a mess for moving goods in and out of the country and into Europe (difficult but ultimately a net positive for Zencargo: it helps facilitate some aspects of that movement for its clients). COVID-19, meanwhile, has impacted economies (again: a difficult impact but also a positive, in that people are spending more money on goods for themselves and less on travel, leading to more demand for shipping those goods around the globe).
The Suez Canal blockage, on the other hand, also continues to loom (not great: Hersham said that Zencargo and others are still dealing with the fallout of those delays, although it’s highlighted the need for blended approaches when it comes to moving goods, with some items shipped slower by sea, and others faster by air or road). And there is the growing priority of how shipping impacts carbon footprints (an area of opportunity, interestingly: Zencargo can provide more efficient routing, and also services to consider how to carbon offset shipping activities).
The more general challenge that Zencargo is tackling goes hand in hand with our existence as consumers.
Many of us do not blink an eye when we go online or to a store to procure something, and we get whatever that happens to be right away.
But the simplicity of wanting and subsequently obtaining goods sits on top of a huge, and hugely complex, logistics operation. It might involve components, assembly or growing and processing things, shipping from one place to another, passing through multiple distribution and shipping hubs, customs, retailers and finally delivery to your store, or directly to you — a logistics chain that, taking all the world’s goods into account, has been estimated to be worth up to $12 trillion annually. Freight forwarding is the process by which all of that logistics works as it should, and in itself accounts for hundreds of billions of dollars in spend, and potentially more than $1 trillion in costs when things go awry.
Traditionally, a lot of freight forwarding work has been done offline, a messy process involving paper and faxing, prone to mistakes, over- and under-supply based on sales and typically hard to scrutinize because of the lack of centralized information. Companies like Zencargo — along with others in the same space like Flexport — have built digitized platforms to manage all of this, tracking items by SKU data, matching shipments with real-time insights into sales and demand, and balancing different kinds of freight options to provide the right items at the right time. (Zencargo works across sea, air and land freight, with sea accounting for about half of all of its traffic, Hersham said.)
Zencargo’s services arguably will continue to see demand growing in line with the growth of the logistics industry, but the curveballs of the last several years, and in the last 12 months in particular, that have impacted the shipping business lay out an interesting road ahead for the startup in the future.
“The freight industry has struggled to keep pace with innovation. Archaic processes are still in place across the board, resulting in widespread inefficiencies,” said Patrick Beitel, managing director and founding partner at Digital+ Partners, in a statement. “Zencargo’s cutting edge technologies, plus deep industry experience and knowledge, are transforming the supply chain, and that marries up perfectly with Digital + Partners’ mission to back companies with best-in-class technology and exceptional management teams. We are honoured to join them on the next stage of their journey.”
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Tive nabs $12M Series A to track shipment conditions in real time
Tive, a Boston-based startup, is building a hardware and software platform to help track the conditions of a shipment like say food or medicine to make sure it is stored under the proper conditions as it moves from farm or factory to market. Today, the company announced a $12 million Series A.
RRE Ventures led the round with help from new investor Two Sigma Ventures and existing investors NextView Ventures, Hyperplane Ventures, One Way Ventures, Fathom Ventures and other unnamed individuals. The company has now raised close to $17 million, according to Crunchbase data.
“Tive helps companies all over the world track their shipments in a very specific way,” company co-founder and CEO Krenar Komoni told me. Using a tracking device the company created, customers can press a button, place the tracker on a palette or in a container, and it begins transmitting shipment data like temperature, shock, light exposure, humidity and location data in real time to ensure that the shipment is moving safely to market under proper conditions.
He said that they are the first company to create single-use 5G trackers, meaning the shipping company doesn’t have to worry about managing, maintaining, recharging or returning them (although they encourage that by giving a discount for future orders on returned items).
Tive hardware tracker and data tracking software. Image Credit: Tive
The approach seems to be working. Komoni reports that revenue has grown 570% in 2020 as the product-market fit has become more acute with digitization hitting the supply chain in a big way. He says that in particular customers and investors like the company’s full-stack approach.
“What’s interesting […] and why we are resonating with customers and also why investors like it, is because we’re providing the full stack, meaning the hardware, the software, the platform and the APIs to major transportation management systems,” Komoni explained.
The company has 22 employees and expects to double that number in 2021. As he grows the company, Komoni says that as an immigrant founder, he’s particularly sensitive to diversity and inclusion.
“I’m an immigrant myself. I grew up in Kosovo, came to the U.S. when I was 17 years old, went to high school here in Vermont. I’m a U.S. citizen, but part of who I am is being open to different cultures and different nationalities. It’s just part of my nature,” he says.
The company was founded in 2015 and its facilities are in Boston. It has continued shipping devices throughout the pandemic, and that has meant figuring out how to operate in a safe way with some employees in the building. He expects the company will have more employees operating out of the office as we move past the pandemic. He also has an engineering operation in Kosovo.
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PayCargo raises $35M from Insight for its cloud-based platform targeting the freight industry
Shipping has long been one of the more antiquated, and least technological, segments in the world of commerce, with its physical aspects — rooted in massive cargo tankers, giant fleets of aircraft and trucks, and trains of linked-up containers — underscoring some of the more obvious analogue attributes of the business.
That has also made it a ripe opportunity for startups, and today, one called PayCargo, which has built a suite of cloud-based payment and financing services for the cargo industry, is announcing $35 million in funding to expand its business in the wake of COVID-19.
The investment is coming from a single, high-profile investor, Insight Partners, which back in April announced a monster $9.5 billon fund that it planned to use not just to support portfolio companies through the global health pandemic, but to seek out new opportunities emerging in the wake of it.
PayCargo appears to be one of the latter. Eduardo Del Riego, the CEO (PayCargo was co-founded by COO Juan Carlos Dieppa and chairman Sergio Lemme), said that while the cargo industry has faced a lot of turmoil with the pandemic — production in some places ground to a halt, social distancing rules created new challenges for how shippers could work and move physical goods — it also highlighted how solutions like PayCargo’s were essential in getting things working properly again.
“With COVID, there was tremendous uncertainty about the impact of the global supply chain,” he said in an interview, “and like many other industries, the pandemic accelerated the need and demand for a paperless and contactless solution, which in turn accelerated PayCargo’s business.”
And while many of us brace ourselves for more fallout about how the world economy is contracting, PayCargo is profitable and has been from its start, the company said, and it has been growing — which in itself could be a positive signal about how production is indeed picking up again.
PayCargo provides a platform that offers tools for payers to send payments, vendors to receive them, APIs to integrate the tools into an existing IT, and financing services for those who do not want to pay for the shipments up front. All of these, for the majority of those working in this area, still are fixed in paperwork and can take weeks to resolve, making it a prime area to tackle with electronic services.
These days, PayCargo is processing some $4 billion in payments annually from some 12,000 shippers and carriers and a network of 4,000 vendors — customers span land, sea and air and include Kuehne + Nagel, DHL, DB Schenker, BDP, Seko Logistics, UPS, YUSEN Logistics and vendors like Hapag-Lloyd, MSC, Ocean Network Express, Alliance Ground, Swissport and Air France — with transaction volume up 80% over last year. By way of its APIs, PayCargo also works with a number of partners to serve customers, including the International Air Transport Association (IATA), Cargo Network Services (CNS), CHAMP Cargosystems, IBS, Accelya, Unisys and Kale Logistics.
We have written before about the very fragmented and analogue freight industry, which still bases a lot of transactions around faxes, actual paperwork physically exchanged between parties and people transferring not just goods but documents hand to hand. The same goes for the payments infrastructure that underpins it all.
That has spawned a number of other startups looking to tackle the market with tech. Emerge has been building a digital marketplace specifically for the trucking industry, while Cargo.com is targeting air freight; Europe’s Zencargo, FreightHub and Sennder are focusing on bringing cloud-based infrastructure into freight-forwarding (and Sennder is positioning itself as a consolidator in this market, recently acquiring Uber’s European business in this area); and Flexport has positioned itself as one to watch in its own take on shipping SaaS.
PayCargo itself also has a number of competitors, which might include those building bigger suites of services, of which payments is just one. In addition to all of the ones we’ve covered, there is GlobalTranz, CloudTrade and others. (Del Riego refused to name any competitors directly. “PayCargo is the premier and most robust solution in the marketplace,” he said flatly.)
Overall, CrunchBase estimates that some $5.5 billion has been invested in shipping-related tech companies looking to bring more updated processes to what is, at the end of the day, ultimately a very physical business.
But with the industry significantly bigger than that — one estimate forecasts that the shipping logistics market in the U.S. alone will be worth $1.3 trillion by 2023 — you can see how building and addressing that would be a lucrative opportunity.
“As the cargo industry rapidly shifts to electronic payments, PayCargo has established itself as the market leading platform for doing business by successfully automating the payments process and ensuring efficiency for both payers and vendors,” said Ryan Hinkle, managing director at Insight Partners, in a statement. “We are excited to work with PayCargo to continue to scale its global payments network and through our Insight Onsite team of ScaleUp and operational experts, help bring additional resources to its impressive list of customers.” Hinkle is joining the board with this round.
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Shyp is preparing for a comeback under new management
Fifteen months after shutting down, Shyp is getting ready to launch again. The startup tweeted today that “We are back! We’re hard at work to rebuild an unparalleled shipping experience. Before we begin operations again, we’d love to hear your feedback in this quick survey. We look forward to working with you and can’t wait to change the future of shipping!”
We are back!
We’re hard at work to rebuild an unparalleled shipping experience. Before we begin operations again, we’d love to hear your feedback in this quick survey.
We look forward to working with you and can’t wait to change the future of shipping!https://t.co/VqyxGOMrIG
— Shyp (@shyp) June 14, 2019
Most of the survey questions focus on online shopping returns, asking how easy or difficult it was to package the product for return, print the prepaid label, purchase postage or ship the product. The last question offers a hint about what direction the rebooted Shyp might take, asking “When returning a product, how likely would you be to use a service that picked up and shipped the product instead of having to ship it yourself?”
Shyp’s website doesn’t say when it will be back or what services it will offer, but it does mention that Shyp restarted in January 2019 under new management and backed by angel investors “with plans to disrupt the industry with what it does best: cutting-edge technology and a superior customer experience.”
Once one of the hottest on-demand startups, Shyp shut down in March 2018 after missing targets to expand to cities outside of San Francisco. When it first launched in 2014, Shyp initially offered on-demand service for almost anything customers wanted shipped, charging $5 plus postage to pick up, package and bring the item to a shipping company. Eventually it introduced a pricing tier in 2016 as it tried to find new approaches to its business model, before closing down two years later.
If the new Shyp does focus on making online returns easier, it will be bringing back one of its most popular services. The company expanded into online returns in 2015 after noticing that many customers used the app to return products they had purchased online.
TechCrunch has emailed Shyp for more information.
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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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Logistics startup Freightos raises $44.4M Series C led by Singapore Exchange
Freightos, a marketplace for logistics providers, announced today that it has raised a $44.4 million Series C led by Singapore Exchange. Returning investors including General Electric Ventures (the lead investor of Freightos’ Series B extension last year), ICV and Aleph also participated in the round, which brings Freightos’ total funding so far to $94.4 million.
Launched in 2016 as a price comparison service for freight forwarders—the agents that organize shipments from a supplier or manufacturer to their final destination—Freightos now also lets users book, manage and track shipments with more than 1,200 logistics providers.
In an email, founder and CEO Zvi Schreiber said its online freight marketplace will continue to be Freightos’ flagship product, but the company also wants to find ways to make the industry more efficient by building a global digital infrastructure.
The company claims to process more than one million instant freight quote requests each month using its patent-pending routing and pricing engines. Its database of global shipping rates also underpins the Freightos Baltic Index (FBX), an industry-specific index created to provide more pricing transparency.
Developed in partnership with the Baltic Exchange, a market information provider for the maritime transportation industry, the FBX tracks freight pricing from 12 major routes around the world and also combines them into one index to serve as the freight industry’s equivalent of the S&P 500.
“Nearly every major global industry, from jet fuel to livestock, leverages dynamic pricing based on real-time metrics to make smarter, automated decisions. We’re excited to explore how our global freight index, the Freightos Baltic Index, can reduce pricing risks and improve stability, and are already exploring implementation with major multinational corporations,” Schreiber said.
He added that Freightos is also looking at more ways to connect airlines with logistics providers to sell cargo space on passenger flights.
Freightos will partner with the Singapore Exchange, which owns the Baltic Exchange, to develop new financial instruments. It will start by launching daily reporting on the FBX, which is currently updated weekly.
In a press statement, SGX head of derivatives Michael Syn said, “Freightos is at the forefront of a new wave of solutions for price discovery and digital marketplaces in global freight – an industry at the heart of the global economy. SGX is excited by the potential to develop risk management tools and services and build on Singapore’s unique position in the trade ecosystem, to bridge the physical and financial markets.”
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Massterly aims to be the first full-service autonomous marine shipping company
Logistics may not be the most exciting application of autonomous vehicles, but it’s definitely one of the most important. And the marine shipping industry — one of the oldest industries in the world, you can imagine — is ready for it. Or at least two major Norwegian shipping companies are: they’re building an autonomous shipping venture called Massterly from the ground up.
“Massterly” isn’t just a pun on mass; “Maritime Autonomous Surface Ship” is the term Wilhelmson and Kongsberg coined to describe the self-captaining boats that will ply the seas of tomorrow.
These companies, with “a combined 360 years of experience” as their video put it, are trying to get the jump on the next phase of shipping, starting with creating the world’s first fully electric and autonomous container ship, the Yara Birkeland. It’s a modest vessel by shipping terms — 250 feet long and capable of carrying 120 containers according to the concept — but will be capable of loading, navigating and unloading without a crew
(One assumes there will be some people on board or nearby to intervene if anything goes wrong, of course. Why else would there be railings up front?)
Each has major radar and lidar units, visible light and IR cameras, satellite connectivity and so on.
Control centers will be on land, where the ships will be administered much like air traffic, and ships can be taken over for manual intervention if necessary.
At first there will be limited trials, naturally: the Yara Birkeland will stay within 12 nautical miles of the Norwegian coast, shuttling between Larvik, Brevik and Herøya. It’ll only be going 6 knots — so don’t expect it to make any overnight deliveries.
“As a world-leading maritime nation, Norway has taken a position at the forefront in developing autonomous ships,” said Wilhelmson group CEO Thomas Wilhelmson in a press release. “We take the next step on this journey by establishing infrastructure and services to design and operate vessels, as well as advanced logistics solutions associated with maritime autonomous operations. Massterly will reduce costs at all levels and be applicable to all companies that have a transport need.”
The Yara Birkeland is expected to be seaworthy by 2020, though Massterly should be operating as a company by the end of the year.
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Natural home products startup Grove Collaborative bets niche wins over the Amazonization of everything
Who needs Amazon when you can make your own online distribution channel? At least, that’s the idea behind Grove Collaborative, a natural home care products company that ships natural cleaning brands like Method and Mrs. Meyer’s. Co-founder Stuart Landesberg started the company in 2014 after working with retail brands during his time as an investor at TPG. He noticed how limited… Read More
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How DHL Pioneered The Sharing Economy
DHL, the international express delivery company, started its business by offering free plane tickets to people on the street. For the trouble of giving up their baggage allowances, passengers were handed a free round trip plane ticket to Hawaii. Founded as a courier service in 1969, DHL used the spare capacity in travelers’ luggage to transport high value documents. To understand why it… Read More
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Rivigo, An Indian Logistics Startup That Uses Tech To Ensure Driver Safety, Raises $30M Series B
Rivigo, an Indian startup that wants to build a more reliable and safer logistics network, has raised a $30 million Series B led by SAIF Partners. The funding, which includes equity and debt financing, will go toward improving Rivigo’s proprietary hardware platform, which it uses to reduce driver fatigue, find the best traffic routes, and monitor the performance of its trucks. Read More
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