Brazilian digital freight marketplace Cargo X announced that it raised $80 million in Series E investment. This was Cargo X’s fifth investment round, which was led by LGT Lightstone Latin America, with participation from Goldman Sachs Growth Equity, Valor Capital and Farallon Capital among others. This funding round brings the total investment in Cargo X to $176 million.
Frequently called the “Uber of Brazilian trucking,” Cargo X is revolutionizing the Brazilian freight industry, which suffers from fragmentation and visibility issues like in the U.S., but on a larger scale. A substantial part of the Brazilian trucking processes is still dependent on paper-based documents and communication over fax, phone and email.
Cargo X looks to sort this out, connecting carriers and shippers over a digital platform. The largest digital brokerage in Brazil, Cargo X employs 400 people and connects about 20,000 carriers and their 400,000 truckers with freight. It also offers financial services and a technology edge that keeps the company competitive in the market.
“Cargo X is implementing an innovative business model and bringing disruptive technology to a segment that has not been digitized yet. With that, it makes the productivity of the road logistics sector in the country increase in a sustainable way, reducing idle capacity in the truck fleets, increasing the income of drivers and decreasing freight costs for shippers and transporters,” Federico Vega, the CEO of Cargo X, told FreightWaves.
The current COVID-19 pandemic has also necessitated enabling touchless operations within supply chains. Vega explained that Cargo X is positioned to offer digitalization and reduce physical interaction via process automation.
“In addition to helping our partner carriers when they need us the most, the new investment will be focused on continuing to develop cutting-edge technologies that allow them to operate 100% online and pave the future of road freight transportation,” said Vega.
Cargo X has shown enviable 20% month-on-month growth in 2020, even amidst the COVID-19 pandemic outbreak. Vega mentioned that customer feedback has also been positive, with the net promoter score (NPS) standing at 62% for carriers and 57% for shippers.
The Brazilian freight startup ecosystem has challenges with raising venture capital to execute business – an issue that Cargo X seems to have solved with its Series E round. Vega called LGT Lightstone – the lead investor in the round – one of the most exclusive and select investors in the world, and that it was “strongly aligned” with Cargo X’s goals and values.
For LGT Lightstone, Cargo X was a relevant investment as it satisfied the objectives of the fund in the Latin American region – having high growth and impact with differentiated technological solutions.
“We believe that this new partnership will help to accelerate Cargo X even more and consolidate the company’s leadership in the sector, particularly at such an important time for the country,” said Gustavo Verdelli, the managing director of LGT Lightstone, on the reasons for the investment.