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Digital freight logistics company Flock Freight today announced that it raised $215 million in series D funding led by Softbank Vision Fund 2, increasing the startup’s valuation to $1.3 billion. The round also included participation from Susquehanna Private Equity Investments, LLLP, Eden Global Partners, SignalFire, GLP Capital Partners, and GV (formerly Google Ventures), and will be used to support the development of Flock Freight’s technology and to expand the company’s talent and operations, according to CEO Oren Zaslansky.
Pandemic-related demand and disruptions have put an immense strain on the supply chain. DAT Solutions found that shippers’ requests for moving goods increased by 577% from April 2020 to April 2021, while postings of trucks available to move goods were down 17%. Meanwhile, ecommerce sales continue to experience outsized growth, with online penetration remaining approximately 35% above pre-pandemic levels, according to McKinsey.
Founded in 2015 by Zaslansky, Flock Freight hosts a marketplace that pools less-than-truckload (LTL) and partial-truckload (PTL) freight shipments so that they can be shipped via a full truckload service. For LTL, Flock Freight facilitates the travel of shipments on trucks to their intended destinations, eschewing the traditional hub-and-spoke freight transit model. In the case of PTL, the platform finds as many as ten trucks along a single route and pools them into a single truckload to maximize savings.
“I’ve been in the trucking and logistics industry for more than 20 years since I founded E&H Transport Network in 1996. I built E&H from the ground up, including the recruitment and onboarding of over 1,000 truck drivers,” Zaslansky told VentureBeat via email. “In 2001, I founded SolSource Logistics, a third-party logistics company serving international Fortune 1000 clients such as Whole Foods, Wegmans Grocery, and Sprouts Market. In serving a diverse customer base in the transportation industry, I identified an unmet need to reduce the significant waste and antiquated approach to transportation. Too often, assets are underutilized and freight moves through intermediary depots when otherwise technology could facilitate those solutions without the waste of brick and mortar.”
Flock Freight also offers instant “prebates” that lower contracted truckload rates when shippers have freight that measures 44 feet or less. With this program, Flock Freight automatically moves eligible freight with shared truckload shipping, ostensibly delivering same-quality truckload service at more palatable prices.
“Flock Freight’s machine learning-based product, FlockDirect, pools less-than-truckload freight consisting of a few pallets together to create full truckloads. It optimizes routes by pooling freight heading in the same direction so that trucks only stop at each drop-off, avoiding traditional terminals,” Zaslansky explained. “To create shared truckloads, Flock’s pooling algorithms sift through an enormous number of possible shipment permutations to find only those which are feasible to execute and economically advantageous for all parties. A ‘combinatorics explosion’ takes place when Flock Freight takes the hundreds of partial size freight shipments it receives per day and uses its complex algorithm to pool them together onto single trucks — combining three to five partial loads and taking into account numerous variables such as destination, timing, product type (food vs. chemicals), and more. For 500 shipments, the possible pooling combinations exceed 62 billion, to put numbers in to show the scale.”
Disrupting competition in the freight industry
Flock Freight claims its driver network in the U.S. and Canada numbers are in the thousands, and each individual driver can be tracked in real time via a dashboard or email notifications. The company says its damage claim rate is a low 0.001% and its on-time delivery rate is 97.5%. It also says it is able to reduce fuel emissions by up to 40% by eliminating the need to switch trucks or stop at warehouses.
“Flock Freight has pooled close to 20,000 shipments … Additionally, Flock Freight’s hubless pooling product has attracted new customers in 2020, including mid-market and enterprise companies such as Berlin Packaging, Blue Diamond Almonds, Mueller Industries, Nature’s Bounty, and Tuft & Needle,” Zaslansky said. “The company has tripled its workforce in 2021 and plans to add even more talent to its Encinitas headquarters and new Chicago location this year, and additional plans to hire more than people in 2022.”
Zaslansky argues that those stats set it apart from competitors in the freight logistics space. Uber offers a service called Uber Freight, to which it recently committed another $200 million as part of a major expansion. San Francisco-based startup KeepTruckin has secured hundreds of millions to further develop its shipment marketplace. Next Trucking last year closed a $97 million investment. Meanwhile, Convoy raised $400 million at a $2.75 billion valuation for a platform that it asserts makes freight trucking more efficient.
“Flock Freight is disrupting the $2 trillion freight industry because it is doing something that no other company has been able to do: fundamentally change the way the industry operates. While digital freight brokerages, such as Convoy, Uber Freight, and Transfix, automate and streamline the connection between shippers and carriers, Flock Freight is the only company changing the way freight gets transported with a whole new mode of shipping,” Zaslansky said. “Our business has grown in spite of the pandemic, not because of it. Because we offer faster shipping times all while protecting shipments from damage, our customers are recognizing and experiencing the power of our shared truckload technology.”
Solana Beach, California-based Flock Freight — which has raised $399 million to date and is on track to hit 325% year-to-date revenue growth — plans for an initial public offering in the next 18 to 36 months.
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