The gargantuan global shipping market seems like something too big for one company to dominate in any respect. But bringing the market into the digital age has been slow according to Freightos, a Hong Kong-incorporated startup that has been matching companies across the supply chain to each other around the world. Already billing itself as the world’s biggest such marketplace, Freightos announced on Wednesday that it has acquired Barcelona-based air cargo company WebCargoNet for an undisclosed sum.
“Freightos was able to provide air freight quotes before, however with WorldCargoNet, we are able to provide even more information and increase the number of air freight forwarders with whom we work,” Freightos CEO Zvi Schreiber told Geektime. “Air cargo is no different than sea cargo or land cargo, in that it is another mode of moving things from one place to another.”
Freightos last raised financing in September 2015 with a $14 million Series B funding round. In total, they have raised $23.3 million from investors like Aleph, Annox Capital, OurCrowd and ICV. And demand is huge. The industry is heading toward a collective value of $23.69 billion by 2019 according to Markets and Markets, and Freightos is not alone in trying to capitalize on that growth, even if it thinks it has the lead in the game right now.
For Schreiber, Freightos was meant to bring the industry to the same level as the travel industry and specifically airlines — which I will playfully label as the ‘human cargo industry.’ That sector has been using automated flight reservation systems for far longer than the current tech boom of the last couple decades.
“Unless your company has massive capital like Amazon and can move into the logistics sphere itself, businesses rely on freight forwarders to get their imports from places like China to their inventory closet. The model works because it must but unfortunately, the logistics industry is totally obsolete and still almost entirely analog, even in 2016,” Schreiber asserted.
Freightos uses its AcceleRate software to “automate pricing and routing for leading carriers, freight forwarders and shippers.” Combining the two companies’ databases, Freightos claims to have over 200 million freight pricing data points about routes and suppliers.
“The logistics industry relies on extremely outdated and inefficient methods of operation including siloed information, lack of transparency, and analog records. Unlike the travel industry, global shipping never changed with the times but what those websites such as Expedia and Kayak did for the travel industry, Freightos and WebCargoNet are doing today for land, air, and sea cargo. It’s no coincidence that one of our investors is a former Priceline executive; changing industries takes time…but there’s never been an industry as in need for change as freight,” Schreiber noted.
It was unclear how much WebCargoNet was sold for as Freightos has refused to disclose numbers. WebCargoNet will retain its brand name and for now, there won’t be any changes to the company’s menu of services. It is also unclear how much cash Freightos has on hand, though a chunk of the deal was made using Freightos’ shares.
Freightos was founded in 2011 and has 110 employees spread across six offices worldwide including Hong Kong, Taiwan, Israel, Germany and the U.S.