SmartHop, a startup that uses AI to help interstate truckers make their routes more efficient and lucrative by removing administrative headaches, just raised a $30 million Series B financing round, bringing the company’s total funding to $46 million following a $12 million Series A last year.
The startup’s main offering is its smart dispatch service, which recommends loads to truck drivers that optimize profits and travel time based on their truck capacity, what cities they’re driving through and other details. With the fresh capital, SmartHop aims to focus more on its fintech products, like the company’s fuel card program that offers fuel discounts and other perks, or SmartHop’s insurance offerings.
“The prices of fuel and insurance premiums within the trucking industry have been rapidly rising and impacting the bottom lines of small truckers (our core market) disproportionately and SmartHop just conducted a survey that found fuel and insurance costs are their top two concerns,” Guillermo Garcia, co-founder and CEO of SmartHop, told TechCrunch.
With fuel prices at such a steep premium today, small trucking companies have less power to negotiate fuel rates ahead of time and are therefore subject to the current high rates for diesel, according to the company. SmartHop’s access to a large network of brokers, freight marketplaces and partners can give smaller companies access to better rates.
Other companies, like CloudTrucks, are also aiming to alleviate pain points for smaller trucking companies, which are majority owner-operators, through a variety of dispatch and financial products.
SmartHop will also use the funds to scale its platform generally and grow out its team, according to a statement from the company.
Trucking is far from an easy job. It tasks the bodies and minds of truckers as they spend hours in social isolation and physical discomfort. Not to mention the stress associated with searching through websites and apps of thousands of brokers to make deals, plan routes and try to have some semblance of control over their income.
Last year, trucking companies in the United States faced a record deficit of 80,000 drivers, according to the American Trucking Associations, a fact that some argue has contributed to supply chain disruption. At a time when autonomous freight startups are getting increasingly larger amounts of funding from investors, SmartHop’s latest round shows that making the job easier for the average trucker today is the real priority.
That doesn’t mean SmartHop’s business model isn’t future-proof. While we’re nowhere near close to autonomous trucks taking over our highways, SmartHop’s service is as relevant for trucking companies operated manually as it is for those that decide to manage autonomous trucks, Garcia said.
Sozo Ventures led SmartHop’s Series B, and existing investors like Union Square Ventures, RyderVentures, Greycroft, Equal Ventures, Las Olas VC and The Fund also participated alongside a range of angels from the logistics and trucking industry.