Cross-border logistics technology platform Forager has begun to seek an exit.
According to sources with knowledge of the deal, the Chicago-based tech-enabled freight brokerage has engaged an investment banker, seeking a strategic buyer at a $50 million valuation.
While FreightWaves is told the company does have hundreds of millions of dollars of freight in its marketplace, including a carrier network of 3,000 companies with about 110,000 trucks, the company hit a $24 million revenue run rate at a mid-single-digits gross margin, showcasing the difficulties of executing cross-border logistics.
FreightWaves reached out to Forager, which declined to comment.
Since 2019, Forager has raised a total of $14.5 million. It has been 16 months since its last capital infusion, a $10 million Series A round that valued the company at $32.5 million and was led by US Venture Partners.
In past funding announcements, the company has noted goals were to expand its technology platform SCOUT, designed to optimize cross-border supply chain operations throughout the U.S., Mexico and Canada.
Launching its newest release of SCOUT in February, co-founder and CEO Matt Silver explained his hopes for building a platform to enable trucking companies to sell their cross-border capabilities.
“Most trucking companies don’t have salespeople. All they can do is call a few brokers and hope they find decent freight. Seeing how carriers can live or die by a few big customers, it became important to us to give them tools to expand their businesses,” said Silver.
In January, Forager also hired Steve Pho, former senior vice president of corporate and business development at RetailMeNot, to become the cross-border company’s new chief financial officer and president.
In an interview with FreightWaves, Pho explained he would be responsible for allocating capital for building SCOUT into a SaaS product to improve the company’s LTV-to-CAC ratio, the ratio of a customer’s or carrier’s “lifetime value” to the customer acquisition costs, to grow the profitability of its average customer.
Related: Startup veteran Steve Pho joins Forager’s C-suite
By taking a page from Silicon Valley’s playbook, Forager hoped to create stickier customer and carrier relationships through more value-added services within its SaaS product, driving product loyalty and long-term use.
“Once you get that density or audience, it opens up a lot of opportunities for you to provide services to both parties. That’s what we’re investigating now, and we have a decent idea of how we want to go about it. Right now we’re trying to get share — gotta continue to grow. Series B capital will go toward continuing to scale the business,” Pho said in the interview.
As the Series B raise progressed, the discussion evolved to M&A, the source said, and Forager’s management became convinced that it would take a strategic buyer, another transportation company, to understand the value of the marketplace and the technology that underpins it.
This is a developing story. FreightWaves will update as the situation develops.
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