SoftBank-backed Flock Freight raised $215 million in new funding round, maintaining its load-matching technology to help shippers pool their goods on trucks to avoid freight hubs. The new funding will help the company hire 300 employees next year and increase the number of shipments per minute by investing in the shipment-pooling algorithmic and machine learning technology.
Earlier, Softbank Group’s Vision Fund 2, an investor in Flock Freight, led the new round. The Japanese company that has made a series of bets in the digital cargo sector-led Flock’s $113.5 million Series C funding round at the end of 2020 to evaluate it as $500 million. The round will value startups at $1.3 billion and provide a total of $399 million in funding.
Furthermore, Encinitas, the California-based business, is competing for shipper customers in a crowded market, where startups are coming under pressure to show profits in the freight-brokerage sector dominated by established players building out their digital services. As Flock Freight targets the more minor than truckload segment, a piece of the broader commercial trucking market in which truckers carry shipments from multiple customers on the exact vehicle.
Flock Freight presents its customer’s carbon offsets through the Carbonfund.org Foundation at no added charge, based on the idea that trucks that move fully loaded are more efficient than vehicles running partly empty. The company plans to go public within three years and be profitable. Flock Freight’s new round is the latest in a string of deals by digital freight startups, suggesting operators are looking for more explicit profitability paths. Also, Uber Technologies Freight unit has claimed to acquire the technology-focused logistic firm to extend its services to higher margin transportation management.
However, to show its sustaining power, Flock Freight will have to prove that its technology beats the transportation-management systems that shippers use and the capabilities that freight brokers have been scaling up to match the digital startups, said Evan Armstrong, president of Armstrong & Associates.