As reported by TechCrunch: Every day I hear about a new ‘Uber for X’ startup and most of them
are pretty crappy, but every now and then one comes across my desk
that’s actually pretty cool.
Los Angeles-based Cargomatic,
which hopes to become ‘Uber for truckers,’ is one of the cool ones. And
it just raised $8 million to expand its platform for connecting
shippers and truckers who are available to help move their cargo.
Launched in 2014, Cargomatic hopes to bring some technology to the
local trucking industry by providing a platform enabling shippers to
list available jobs that local truckers with excess capacity can
complete. By making the connection, the company hopes to not only help
truckers make more money, but also to route shipping more efficiently.
The company has a website where companies can enter the details of
cargo they need to ship, and a mobile app that can be used by truckers
to accept jobs and track their routes.
Like other on-demand services, Cargomatic vets drivers who sign up,
reviewing their commercial licenses and insurance to ensure they have
everything they need to transport another company’s goods. It also
provides pricing transparency by determining how much a driver should
make based on the weight and distance of goods that they move.
Finally, the platform enables truckers to get paid more quickly by
facilitating the invoicing and payments portion of the transaction.
Shippers are asked to enter their credit card or ACH information, which
Cargomatic uses to pay out truckers shortly after a job is completed.
Before platforms like Cargomatic, most companies that needed to move
cargo mostly relied on a few local truckers that they knew, according to
Cargomatic CEO Jonathan Kessler. But those truckers weren’t always
guaranteed to have excess capacity. Meanwhile, truckers had to deal with
uneven work schedules and driving for a limited number of shippers.
The company hopes to reduce that friction in the market by giving
shippers a way to quickly get their goods shipped while also increasing
income for truckers by making them aware of jobs that are available.
Because it knows where truckers and available jobs are, it can also do
more efficient routing to reduce the cost of transporting goods.
Cargomatic has been operating in Southern California and in the New
York metro area, but it’s looking to expand. To do that, the company has
raised $8 million led by Canaan Partners with participation from Volvo
Group Venture Capital, Rob Estes of Estes Express, Morado Venture
Partners, SV Angel, Sherpa Ventures, Structure Capital, Nicolas
Berggruen, Scott Banister, Fritz Lanman and Hank Vigil.
That funding will be used to aid the company as it rolls out to new
markets and brings on new drivers. Having Canaan on board should help,
as the firm has invested in a number of marketplace startups and
generally understands the dynamics involved in making them successful.
Kessler believes having Volvo’s venture group invested could provide
some side benefits in helping it market to truckers. Another notable
investor is Estes, who is the owner of the largest private trucking
company in the U.S.
Of course, having money is good and having investor help is better,
but Cargomatic hopes to succeed mainly because it’s solving a big
problem. The local trucking industry is a $70 billion opportunity, after
all. Cargomatic just wants a small piece of that.
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