CargoX raises $10M Series B for trucker marketplace

Zero-waste economy sees yet another entrant trying to make the trucking industry more efficient

Financial trends and news by Ronny Kerr
July 20, 2016
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The trucking industry, still vital to transporting goods across our globalized world, has attracted yet another tech startup to its doorstep. And, of course, it’s all about making shipping and transporting goods a lot more efficient.

CargoX, a São Paulo-based marketplace connecting shippers with truckers, today announced that it has closed a $10 million Series B round of funding led by Goldman Sachs with participation from existing investors Valor Capital Group, Oscar Salazar (co-founder of Uber), Hans Hickler (former CEO of DHL Express US), Agility Logistics, and Lumia Capital.

The company had previously raised a $4 million Series A round led by Valor.

Though most people probably don't think about it, the trucking industry is still massive. It is estimated that there are 15.5 million trucks, more than 3.5 million truck drivers, and 1.2 million companies operating in the U.S. alone. Brazil, according to CargoX, is still largely dependent on trucks due to minimal alternatives (railroad, air, sea). That's why the company says 65 percent of all Brazilian freight is moved by trucks.

The problem is that, though the industry has been around for awhile, many inefficiencies persist. In particular, on the trucker side, there is the problem of filling up trucks to capacity so they’re not driving around half-empty. (CargoX says Brazilian trucks drive empty 40 percent of the time—an issue that’s not just costing truckers money, but one the startup characterizes as a major environmental problem.) On the flip side, shippers always need to find truckers to meet their needs for time, availability, and cost.

Through its technology platform, CargoX offers shippers a way to connect with a network of more than 150,000 truck owners and operators in order to discover excess capacity. It’s a bit like Airbnb for the commercial shipping world in that it puts an unused asset (apartment or truck space) to work, generating additional income for the owner of that asset.

“CargoX is changing the way people think about the trucking industry and generating a positive impact by reducing trucking costs for the overall economy of Brazil,” said investor Oscar Salazar, who helped build the prototype for Uber in early 2009.

Though CargoX may benefit from Salazar’s expertise in the zero-waste economy (as well as its focus on the Brazilian market), it is far from the first tech startup to provide this service for the trucking industry. Seattle-based Convoy closed a $16 million Series A round from Greylock this past March for on-demand trucking, available today in Washington and Oregon. Earlier this year, Cargomatic closed an $8 million Series A from Canaan Partners for a similar service.

Trucker Path, whose CEO and founder Ivan Tsybaev spoke at Vator Splash Spring in May, and Transfix are just a couple other examples of companies in this space. I’ve reached out to CargoX to see how they plan to compete. Operating in Brazil is obviously a key differentiator, but it will be interesting to note their plans for international expansion.

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