With supply chains under constant stress because of the pandemic, freight forwarding has become one of the hottest startup sectors in the last two years. Indeed, international freight forwarding is now a $199 billion market. And the evidence is mounting.
In November last year, digital freight forwarder Forto raised another $50 million in a round led by Inven Capital. In April this year, Nuvocargo raised $12 million to digitize the freight logistics industry. In May, Zencargo, with a freight-forwarding platform, raised $42 million. In June, freight forwarder sender raised $80 million at a $1 billion+ valuation. In July Freightify landed $2.5 million to make rate management easier for freight forwarders.
And today, Vector.ai, which says it helps freight forwarders improve productivity via its AI platform, has raised $15 million in a Series A led by U.S. VC Bessemer Venture Partners. It was joined by existing investors Dynamo Ventures and Episode 1. Bessemer’s investment is yet another sign that U.S. VC continues to make incursions into the U.K. and European tech scene.
Vector now plans to accelerate its international expansion plans as an automated system for freight forwarders.
The problem it’s tackling is this: Freight forwarders lose time to repetitive administrative tasks as they execute shipments, such as hunting through customer emails etc., rather than concentrating on higher-value activities. Vector.ai says it’s machine learning platform can automate these tasks.
Its customers now include Fracht, EFL, NNR Global Logistics, The Scarbrough Group, Steam Logistics and Navia Freight, as well as other top-10 freight forwarders.
James Coombes, co-founder, and CEO of Vector.ai, commented: “Most employees within freight forwarders spend the majority of their time communicating with the 10-25 different entities that might be associated with a given shipment and coordinating freight movement and documentation. Communication usually runs through email and attachments… The volume of freight continues to rise globally — and with the added burden of Brexit and pandemic disruptions such as the recent port closure in China — freight forwarders are facing staffing shortages, steep wage increases and shipping delays that continue to cost companies money in lost revenue and spoiled goods. They cannot afford to keep wasting time on low-level processing, which is why we created the technology to automate basic tasks.”
Mike Droesch, partner at Bessemer Venture Partners, said: “Vector.ai is one of the early leaders in an emerging category of freight forwarding workflow automation and digitization tools. It has built an intuitive and industry-focused product — which is already winning over some of the largest freight forwarders.”