Smart trucking startup CargoX raises $20M
CargoX announced today that it has raised $20 million in Series C funding led by Goldman Sachs.
The startup is currently focused on the Brazilian market, where it connects businesses that need to ship something with drivers who have excess capacity in their trucks. The goal is to help truckers make more money while reducing shipping costs for businesses.
When I talked to CEO Federico Vega and investor Oscar Salazar (who co-founded Uber), the big theme of our conversation was data. Beyond the basic data that CargoX uses to find excess capacity, Vega said the company has also started to integrate with GPS devices, giving customers more precise information about where their freight is at any given moment, and allowing CargoX to get even smarter about optimizing shipments and routes.
“Ideally, you should have trucks that are never running empty once — and for the drivers, waiting times should be nonexistent or minimal,” Vega said.
And when the data is combined with machine learning technology, Salazar said CargoX could also start doing things like adjusting pricing in real time.
“We’re right now in the process of gathering data,” he said. “Next year will be about utilization of data.”
CargoX launched in March of 2016, and Vega said that its current revenue run rate already places it among the top 25 trucking companies in Brazil. It’s also signed Unilever as a partner.
The company has raised a total of $34 million. In addition to Goldman Sachs, new investors Soros and Qualcomm Ventures also participated in the round, as did existing backers Agility Logistics, Valor Capital Group and Salazar himself.
After bringing on big-name investors, you might think CargoX has plans to expand globally, or at least to the U.S., but that’s not the case. For one thing, Vega said Brazil provides a big opportunity on its own, particularly because the lack of railroads means that an unusually high proportion of the country’s freight gets shipped by trucks.
“One of the things we have learned in the tech industry is that expanding fast is not always the best decision,” Salazar added. So when CargoX meets with investors, “our pitch is: only Brazil, until we actually win and conquer Brazil.”