Emerge has raised $50 million to help shippers connect with carriers and manage freight … [+]
The freight transportation industry is massive and full of inefficiencies, with trucks often operating 20% empty. To fill their cargo holds and increase profitability, carriers are abandoning their old books of business and spreadsheets and turning to mobile apps that help them search for customers rather than waiting for a dispatcher to call them. At the same time, shippers are also using these online marketplaces to expand carrier options and lower their cost of moving goods. The competition to facilitate these transactions is fierce, and Emerge is one of many new digital freight platforms angling to be the one that transforms this $600 billion domestic full-truck load industry.
Emerge is an Arizona-based digital freight start-up that plugs into a shipper’s current transportation management system (TMS), such as Oracle, BluJay, or SAP. Their integration enables customers to bring the carrier networks they currently use into the platform and creates a sort-of private freight marketplace for shipper. Customers use Emerge to manage their existing vendors and trucking spend, and it also enables them to open their bidding process to an additional stable of 30,000 trucks.
Its business model is very similar to freight broker heavyweights such as Convoy, Uber Freight. So what separates Emerge from them and the myriad of other well-funded start-ups such as Loadsmart, KeepTruckin, Next Trucking, and Transfix? CEO Michael Leto positions the company as more shipper-focused.
Convoy and Uber Freight are going after the trucks, he says, while Emerge is going after the shippers. His goal is to help the customer get the best possible truck for their load, and that could contracting with an aggregator network.
“We’re more like a “Kayak for trucking,” says Leto. “Whether it comes from our marketplace or their network we just want to make sure the best truck is procured.”
That decision usually comes down to price, however, there are other factors such as on-time delivery and acceptance rate play a role in decision making. Having access to a larger network of carriers beyond their current vendor list can help them identify a faster or cheaper shipping solution.
“The perfect truck could be waiting outside of your facility, but it won’t have access to your load if you’re only doing business with 50 vendors,” explains Leto.
But his logic assumes this hypothetical perfect carrier is also using Emerge to connect with shippers. Convoy and Uber Freight have apps that are more driver-friendly for the independent flat-bed owner and fleet driver to use and boast a network of more than 100,000 trucks. With no app, Leto says that his company tends to do business with midsize freight moving companies, which have have dispatchers who go through their web portal to assign truck loads.
To date the platform is used by approximately 200 shippers, with $1 billion of freight moving through platform annually. Like other broker platforms, Emerge collects a small percentage on transactions that connect a shipper and carrier.
To help the company grow, Emerge announced that it raised $20 million in a Series A financing round led by NewRoad Capital Partners with participation from existing investor Greycroft, bringing total investments into the company to $50 million. The new capital will be used to expand development, operations and enterprise sales teams, and is expected to move into its brand new 37,000 square foot headquarters in Scottsdale in March.