A Brazilian trucking startup, CargoX, has successfully secured $20 million in a Series C funding backed by banking behemoth Goldman Sachs, TechCrunch reports. A company with its eyes still in the Brazilian market, it has provided trucking capacity for businesses by connecting them with independent truckers found in its database. With a business model strikingly similar to on-demand trucking services in the U.S., it has become an effective way for businesses to cut down on shipping costs while ensuring that the end consumers receive the goods that they have ordered online.
CargoX CEO Federico Vega talked to TechCrunch alongside Uber co-founder and CargoX investor Oscar Salazar, discussing how the centerpoint of the investment is data. There are shipment in major Brazilian cities in need of truck space and CargoX has this database of trucking services willing to contract to ship the goods. Integrating this database with GPS devices helps local businesses locate the nearest truck driver available for deployment.
It served as a win-win situation for both parties, according to Vega. “Ideally, you should have trucks that are never running empty once – and for the drivers, waiting times should be nonexistent or minimal.” Prices are set based on distance to be driven among other things. But since the technology is still in “the process of gathering data,” Vega has sees that “next year will be about utilization of data.”
According to Business Wire, CargoX’s investors included, apart from Goldman Sachs and Uber’s Salazar, entrepreneur George Soros, Qualcomm Inc.’s investment arm Qualcomm Ventures, and later on, Agility Logistics and Valor Capital Group. The Series C funding managed to outpace the $14 million raised from the Series A and Series B rounds. The overall investment now tops $34 million.
CargoX’s business model leverages the trucking capacity sitting idle to provide trucking services to enterprises without fleets. Small businesses don’t have to buy their own delivery vehicles and independent truckers will never run out of shipments to move around the city again.
With an industry worth an estimated $100 billion, CargoX has seen 500% year-over-year growth. It was enough for Goldmach Sachs to throw in its investment support behind CargoX, according to Head of Private Capital Investing Group, Hillel Moerman. “CargoX has experienced impressive growth and we are excited to provide further funding to support continued growth.”
Qualcomm Ventures’ Vice President of Latin America, Carlos Kokron, was just as impressed with the numbers that CargoX has come up with as far as profits go. “We were impressed with the CargoX team and the logistics platform they’ve created, which is transforming the way people think about the trucking industry.”
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