Flock Freight closed a $113.5 million Series C as the digital logistics provider attracts larger shipping customers and is seeing 4 times revenue growth this year.
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The new round was led by SoftBank Vision Fund 2. Existing investors SignalFire, GLP Capital Partners and Google Ventures, and new strategic partner Volvo Group Venture Capital also participated in the round.
“Since inception of the Vision Fund, we’ve been interested in transportation and logistics,” said Ervin Tu, managing partner at SoftBank Investment Advisers. “Flock Freight’s goal is to disrupt the traditional freight industry and create significant new value for shippers through use of proprietary algorithms.”
The Solana Beach, California-based company uses algorithmic pooling technology to allow less-than-truckload (LTL) shippers to share trailer space in one full truckload. The company’s platform allows for optimizing transit routes and moving multiple loads on one truck.
This gives shippers who cannot fill an entire truck an opportunity for higher quality truckload service with less damage and delay, said founder and CEO Oren Zaslansky.
“We are fundamentally changing freight movement,” Zaslansky said.
Preparing for the worst
Flock Freight announced a $50 million Series B in February, but the round actually closed late last year, Zaslansky said.
As the COVID-19 pandemic hit, the company modeled different scenarios to conserve money, but actually started to significantly grow as it captured more middle-market and enterprise customers. The company even added to its employee base, growing from 50 to 130, he added.
By summer, Flock Freight started to receive inbound interest from investors. With the company growing even through a pandemic, the timing was right to increase research and development in its pooling technology, especially when SoftBank came knocking, Zaslansky said.
“SoftBank was aggressive, and they’ve looked at everything in the space,” he said.
Room to grow
Flock has more than 1,200 SMB customers and about 100 middle-market and enterprise clients, Zaslansky said. Founded in 2015, the company has raised approximately $184 million to date, according to Crunchbase data.
Along with its revenue growth, the company also has increased margins by 15 percent this year, he added.
Zaslansky expects those numbers to only grow. He sees no other startups in Flock’s exact market, although he said that a company like C.H. Robinson does handle a lot of LTL shipments.
While Flock could see acquisition interest from large technology players in the shipping sector like Amazon and Alibaba, Zaslansky said he could see a possible IPO in the company’s future, especially considering investors such as SoftBank.
Tu said industry estimates put the combined FTL and LTL market at greater than $300 billion and SoftBank believes Flock Freight could be a $1 billion-plus revenue company in several years.
“We can take this to the public market,” Zaslansky said.
Illustration: Li-Anne Dias.
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