Xeneta, which offers a crowdsourced price comparison service for sea freight, has raised a €1.2 million (~$1.6m) seed round led by the Stockholm VC Creandum, with participation from Norwegian private investment firm Alden. The new funding will be used to expand into new markets, specifically adding to the breadth of coverage for its comparisons in terms of the number of “trade lanes” in and out of Europe. Up until now, the 2012-founded company had been bootstrapped.
Targeting freight buyers (producers, importers, exporters or basically any company transporting cargo by containerized sea freight) and freight sellers, Xeneta operates a price comparison service to compare and share rates against the market average and “best in class performers”. The Oslo, Norway-based startup’s broader mission is to bring greater transparency to an industry that it says remains opaque and is often burdened by supply chain complexity and laden with hidden charges. Thus, by enabling freight buyers and sellers to share their rates anonymously, it aims to change the dynamics of the shipping industry, bringing with it greater market efficiency.
It’s a rather large market, too, and one of the most global industries in the world, says CEO and co-founder Patrik Olstad Berglund. The number of companies that “move vast amounts around the globe” via sea freight containers amounts to more than 300 million transactions per-year and over $150 billion in turnover. So it’s a great candidate for disruption.
The crowd element means that anybody using Xeneta is encouraged to share the rates they are being offered or providing for specific routes/lanes before they can view the same aggregated data. In other words, to get data out, companies are incentivized to put data in.
Meanwhile, the company has managed to grow its coverage to over 125,000 data points per-month on 1,100 port-to-port combinations to and from Europe. It competes with the likes of World Container Index, and Shanghai Shipping Index, but claims to have greater coverage and a model that can scale better.
The basic service is free, although in the future Xeneta plans to ship a paid-for version and/or features to provide companies with further industry insights, something it’s been developing with the help of a small number of customers. However, the primary focus to date has been to grow the database and get the required network effects to make the company’s proposition truly valuable.