- For the past two years, venture capital has been rapidly flowing into the logistics space.
- The 10 highest-raising logistics startups have landed more than $1 billion this year.
- Many top logistics founders set out to fix problems they encountered working in the industry.
- See more stories on Insider’s business page.
In the year leading up to the pandemic, logistics startups posted some of the largest rounds the industry had ever seen. But once the impact of COVID-19 waylaid the global supply chain, the rounds seemed to flow in even faster.
Combined, the 10 startups below — all of them aiming to rethink how goods are moved and tracked from port to porch — have raised more than $1 billion this year.
The capacity of incumbent players, from monitoring freight movements starting at the factory to booking trucks in the US and delivering consumer goods purchased online, was stretched in 2020 as decades-old systems started to break down.
Project44’s recent $202 million Series E is one such eyebrow-raising funding round. CEO Jett McCandless told Insider the desperation of businesses trying to move goods in an environment marred by record freight rates, port congestion, low airfreight capacity, and labor shortages had created an enormous opportunity for anyone that can help. And since startups tend to be more agile than their incumbent counterparts, they’re winning big by developing new capabilities and services on the fly.
But even in the middle of a once-in-a-100-years event that bolstered demand for logistics tech and innovation, McCandless said fundraising was a skill founders and CEOs needed to develop.
“The No. 1 job as a CEO is to make sure you don’t run out of capital. If you’re going to run a company that’s cash-flow-negative, which a lot of tech startups are … then you have to know how,” he said. “Otherwise, things won’t happen.”
These are 10 of the logistics startup CEOs who have been most successful at raising the kind of funding that gives startups the runway to influence even millennia-old industries like logistics.
Nuro CEO Jiajun Zhu
Total raised: $1.5 billion
Top investors: SoftBank, Greylock, Chipotle
Nuro develops and operates delivery robots for the likes of Walmart, CVS, Chipotle, and Domino’s. Investors like Baillie Gifford and Greylock Partners praise the startup’s focus on delivery, since competitors in the autonomous-vehicle space often combine target markets from passengers to trucking and delivery. Nuro sells its autonomous delivery robots as a service.
CEO Jiajun Zhu cofounded Nuro in 2016 after eight years in Google’s autonomous-vehicle project (which has since spun out as Waymo). The CEO has raised $1.5 billion and earned his company a $5 billion valuation.
Flexport CEO Ryan Petersen
Total raised: $1.3 billion
Top investors: SoftBank, Founders Fund, GV
Flexport is a tech-enabled freight forwarder that provides more visibility into freight movements than traditional forwarders for clients like Amazon and Georgia-Pacific. The company has been gaining market share fast since it got started in 2013 — with a turbo boost from a $1 billion Series D round led by SoftBank in 2019. The round valued Flexport at $3.2 billion.
This is cofounder and CEO Ryan Petersen’s second startup with the goal of digitizing global trade. The first, ImportGenius, attempted to digitize and sell ocean-shipping data but eventually plateaued, according to TechCrunch.
It hasn’t all been smooth sailing for Flexport, either. The company laid off roughly 3% of its staff in the early-2020 wave of freight layoffs. But the company remains one of the most high-profile logistics startups.
Flexport has served as a sort of pacing vehicle for the entire logistics-startup space in terms of fundraising, especially since its first seven-figure round in 2017, and rumors of an initial public offering are swirling.
Convoy CEO Dan Lewis
Total raised: $668 million
Top investors: Greylock Partners, T. Rowe Price, Baillie Gifford
Convoy was the first in what is now a sizable class of startups attempting to digitize trucking brokerage. CEO Dan Lewis spent time at Microsoft, Google, and Amazon before cofounding Convoy in 2015. His fundraising prowess has landed the company a $2.75 billion valuation and put it in what he told Insider in 2019 was a class of two, with Uber Freight.
Lewis’ argument for Convoy’s leading edge in that matchup is that it has been leveraging data since the early years. Lately, Convoy and Uber Freight (as well as their younger compatriots) are increasingly sparring with traditional brokers as they take market share. Lewis told Insider in May that the segment was headed into a new phase of maturity where clients use digital brokers in the way they would employ a traditional broker, not as a new thing they’re trying out.
Project44 CEO Jett McCandless
Total raised: $443 million
Top investors: Goldman Sachs, Silicon Valley Bank, Insight Partners
Project44 gained entry to the unicorn club in June with a $202 million Series E round that valued it at $1.2 billion. The Chicago startup provides freight-tracking services and estimated times of arrival for shipping containers.
Founder Jett McCandless started his career in freight as a truck broker and has received several offers to sell the business in the past five years. He told Insider he didn’t sell because of his and his team’s ambition to change the way supply chains operate with data.
ShipMonk CEO Jan Bednar
Total raised: $365 million
Top investors: Summit Partners, SJF Ventures, Periphas Capital
ShipMonk is an e-commerce-fulfillment company and the funding leader in a growing class of startups operating warehouses in addition to providing customers with software to help orchestrate e-commerce businesses. It operates four warehouses in the US, with a fifth on the way, and will open its first warehouse in Europe this year.
CEO Jan Bednar came to the US from the Czech Republic at the age of 17 to play hockey at Florida Atlantic University, he said in an interview. His interest in shipping stemmed from being so far from home and finding it difficult to send things back to family and friends. He bootstrapped ShipMonk for the first three years and then raised a $10 million round in 2018. It wasn’t until the end of 2020 that private equity came knocking with $355 million. In 2021, the CEO plans to increase head count by 50%.
Arrive Logistics CEO Matt Pyatt
Total raised: $350 million
Top investors: Temasek, Lead Edge Capital, The Baupost Group
Arrive Logistics is a Texas freight brokerage that had a modest war chest until recently. In April, the company added a $300 million private-equity investment to its $50 million from three previous venture rounds. The massive influx paints a stark contrast to early 2020, when Arrive laid off or furloughed roughly 10% of its staff.
CEO Matt Pyatt spent just three years in trucking at Command Transportation before founding Arrive. He told FreightWaves the $300 million investment was a “long time coming” and should fuel the firm’s growth for the next five years.
Optoro CEO Tobin Moore
Total raised: $244 million
Top investors: Ikea, UPS Ventures, Revolution
Optoro hopes to reduce the cost of returns by streamlining the process of gathering and processing them with dedicated software, instant credit, and drop-off in the stores of partnering retails. CEO Tobin Moore told Insider in March that the lifting of pandemic restrictions would bring a “surge” of returns. A $75 million influx in 2018 helped the company scale up to conquer it.
Optoro customers include Ikea, Target, American Eagle Outfitters, and Bed Bath & Beyond. Moore spent several years running an online reselling business before cofounding Optoro in 2008.
Relex Solutions CEO Mikko Kärkkäinen
Total raised: $236 million
Top investors: Summit Partners, TCV
Relex Solutions was founded in 2005 in Finland, and its influence on the retail supply chain has grown especially quickly since raising $200 million from TCV in 2019.
The company builds retail-forecasting tools in use at chains like the UK’s M&S, PetSmart, and Albertsons. The software uses artificial intelligence and machine learning to predict demand and help retailers best locate inventory for those sales — a key element in brick-and-mortar and e-commerce logistics, especially as online order fulfillment speeds up and diversifies. A 2020 Forrester report put Relex ahead of Oracle’s and SAP’s relevant offerings at the time.
CEO and cofounder Mikko Kärkkäinen has a background in supply-chain consulting. “We like to see ourselves as an antidote to Amazon,” he told TechCrunch in 2019. He considers Relex a way for retailers to outsource the decades of tech development Amazon has done in-house.
KeepTruckin CEO Shoaib Makani
Total raised: $227 million
Top investors: Index Ventures, GV, Institutional Venture Partners
KeepTruckin achieved unicorn status in 2019 — one of the earliest in this group to do so. The company makes fleet-management software and hardware for trucking companies and is in the process of branching out into new roles. Like many freight startups, KeepTruckin wavered in 2020 — laying off 349 staffers, 18% of its team. But later that year, it launched a load board, where shippers list loads for carriers to move, and teamed up with the trucking giant J.B. Hunt to fill it out.
Before founding KeepTruckin, CEO Shoaib Makani worked at Google and on the investor side at Khosla Ventures. He developed the KeepTruckin concept by spending time at truck stops to make sure its technology catered to drivers’ needs.
KeepTruckin developed its electronic logging device for trucks shortly before the US government mandated the tech’s use in 2016, and the company grew as mandatory compliance kicked in. Makani’s goal from the beginning has been to leverage the data gathered with the company’s hardware to inform its marketplace and attract more shippers and carriers.
FourKites CEO Mathew Elenjickal
Total raised: $200.5 million
Top investors: Bain Capital Ventures, Hyde Park Venture Partners, Volvo Group Ventures
FourKites is a software platform that provides real-time visibility for global freight. It strives to make freight movement visible from end to end within global supply chains. FourKites has brought high-profile customers like Walmart Canada, Land O’Lakes, Coca-Cola, and 3M on board. Gartner deemed FourKites a leader in its field, slightly behind Project44.
CEO Mathew Elenjickal founded FourKites in 2014 after seven years working in the supply-chain-software space. The CEO roughly doubled his money in March with a $100 million round. In interviews, Elenjickal emphasized the importance of finding strategic investors with deep supply-chain knowledge.
He followed the recent round with FourKites’ second acquisition, the logistics-software platform Haven. The company’s first acquisition closed in 2020 when it acquired TrackX-Yard Management Solutions.