Fueled by an unprecedented surge in e-commerce, retailers and restaurants of all stripes are signing on to last-mile delivery management software services.
Riding that wave, Onfleet, a San Francisco-based provider of delivery management software, announced on Friday it has raised $14 million in Series A.
The round was led by Kennet Partners and will allow Onfleet to continue broadening its product offerings and expanding its global footprint, said Khaled Naim, Onfleet’s co-founder and CEO.
Optimizing delivery, in the U.S. and abroad
Launched in 2015, Onfleet is the outgrowth of another company Naim and his two co-founders started that focused on helping people communicate locations in emerging markets.
That company, Addy, targeted people in countries lacking a functioning street address system and helped them create simple URLs and share with friends or businesses for the purpose of delivery.
Along the way, the founders realized that many of the retailers didn’t have technology on the back end, and were still managing their fleets manually.
Retailers in Western countries were likewise facing technological challenges.
Modernizing these fleets was an obvious business opportunity, but Naim’s team wanted to go beyond popular on-demand smartphone solutions.
“We saw a reinventing of the wheel,” Naim told FreightWaves. “We saw we could build technology as infrastructure that would allow businesses to focus on their product and customers.”
Today Onfleet claims 80 million deliveries in more than 90 countries — though mostly in the U.S., Canada and Europe — for thousands of clients including Kroger, Sweetgreen, Drizly, Imperfect Foods, Alto Pharmacy and Gap, among others. Its mission is pretty simple: to make delivery easier and more efficient for businesses thrust into the brave new world of e-commerce.
As such the platform takes care of everything from routing to vehicle optimization, driver management and customer service notifications.
Zeroing in on the driver
The delivery management space is getting increasingly crowded, with dozens of young players and big guns alike entering the industry in the past few months alone. Nevertheless, the industry “is still very much in its infancy and has a lot of room to grow,” Naim said. “It’s still very much a greenfield opportunity.”
Onfleet will use the new funding to build out its team, aiming to hire an additional 20 people in engineering, sales and marketing, and customer success, as well as expand into new markets. The team is especially interested in using cutting-edge AI and machine learning technologies to innovate easy-to-use platforms for customers.
One potential growth area is helping customers source and train drivers. When the pandemic hit, Naim noted, Onfleet set up a job board for drivers looking for work as well as the companies that needed them.
Since then more than 1,000 drivers and 73 companies have posted to the board. “That showed there was definitely an opportunity to facilitate sourcing of drivers and helping companies connect with delivery sources,” Naim said.
Drivers are the most expensive element of last mile, and the customer-facing element of the delivery process.
“So how do you make sure to keep a consistent level [of quality,]” Naim mused. “There’s a lot of interesting things we can do there. That’s actually the area I am most excited about.”
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