This morning Truckstop.com announced that ICONIQ Capital, a leading Silicon Valley growth equity firm, has made a majority investment in the online freight matching and load board solution. The whisper number heard for the pre-money valuation was just under $1 billion.
ICONIQ Capital has closely guarded the identities of its limited partners, but they are known to be a who’s who of Silicon Valley billionaire family offices. Facebook founder and CEO Mark Zuckerberg, Dustin Moskovitz and Sheryl Sandberg are all investors, as is LinkedIn founder Reid Hoffman and Twitter and Square’s Jack Dorsey. ICONIQ maintains offices in San Francisco, New York, Palo Alto and Singapore.
“The $1 trillion freight industry is primed for incredible growth and technology adoption in the coming years, as tech-enabled platforms are increasingly essential for managing operations, reducing costs and improving efficiency,” said Will Griffith, Partner at ICONIQ Capital, in a statement. “Truckstop.com is the premier and trusted partner in this space, with an advanced technology platform that removes friction for all parties within the freight ecosystem, and an established network of transportation professionals across the country.”
Truckstop.com CEO Paris Cole spoke to FreightWaves by phone about the ICONIQ deal and the vision shared by the investors and Truckstop.com’s management team.
“ICONIQ found us,” Cole said. “They started calling on us a couple years ago now, and we’ve had several interactions, obviously a lot more over the last few months. In talking with them, what they really appreciate about us is our neutral marketplace, the fact that we serve both carriers and brokers. They believe in that business model — that’s part of why they decided to make the investment.”
A shared culture, a commitment to delivering a world-class product, and the network that partnering with ICONIQ would provide to Truckstop.com were the main factors in choosing them as an investor, Cole said.
“The number one thing they’re telling us to do is move faster,” Cole said.
Cole emphasized that Truckstop.com would never become a broker itself and was not looking to disrupt that industry, but was focused on enabling its customers, both brokers and carriers, to do business more easily.
But what will Truckstop.com do with the money?
“First and foremost,” Cole said, “we’re making a major investment in our development teams. By the end of the year the goal is to double the size of our development teams… I will tell you that in total, in 2019 alone, we will be adding over 130 jobs. That will allow us to bring out new products and features, some of which are already under development currently, while others are on the roadmap.”
Truckstop.com’s annual revenue is in the $110-120 million range. The financial terms of the deal have not been disclosed, but given ICONIQ’s investors and philosophy it is expected that Truckstop.com was valued on a revenue multiple of 8x to 9x, typical practice for software-as-a-service companies in a growth phase rather than an EBITDA multiple.
That said, it’s probably more correct to think of ICONIQ’s Truckstop.com deal as making a “platform-as-a-service” play, rather than the simple acquisition of an individual software product. Platform-as-a-service is a term coined by Marc Benioff to describe Salesforce. It is defined as “a cloud model that provides all the infrastructure required to create and manage custom cloud apps.” In other words, a platform-as-a-service company encourages other developers to build their own apps on top of the original platform – think of all the startups that customize Salesforce and build new products within the Salesforce ecosystem.
Today, Truckstop.com’s offerings include payments, transactional insurance, freight tracking and visibility, marketplace rates, load matching, factoring and a transportation management system (TMS), offering a nearly complete workflow business for trucking transportation. FreightWaves expects the enormous resources now at Truckstop.com’s disposal to be deployed in acquisitions – snapping up smaller FreightTech start-ups whose products are destined to become ‘features’ of Truckstop.com’s platform – and in accelerating organic growth.
The general partners at ICONIQ have the capital, expertise and strategic vision necessary to rapidly build multi-billion dollar technology companies. According to Crunchbase, ICONIQ’s portfolio of companies includes tech standouts DocuSign, Robinhood, SurveyMonkey and HeadSpin.
DCS Advisory, led by Dave Dolan, one of the leading investment bankers that covers FreightTech, advised Truckstop.com on the deal.
