Cargo Zooms Ahead with New Cash, Plans to Expand to 10 Cities
Score one for mobile convenience stores.
Cargo, a New York City-based graduate of the Techstars Mobility accelerator, announced Monday it has raised more money from investors, reached its one millionth passenger, and will soon expand from test markets in New York, Chicago, and Boston to new cities . We caught up with Cargo founder and CEO Jeff Cripe at the Detroit auto show to hear more.
Cargo sells snacks, personal care items, and other things a person might need during a night out on the town, via automated boxes placed in rideshare vehicles (like Uber or Lyft). The company’s service, open to any rideshare driver who qualifies, allows passengers to use their phones to buy simple sundries like a phone charger, pack of gum, or bottle of water. Drivers get a text alert after the order is placed that tells them what has been purchased, which they then hand to the passenger. Passengers can pay via PayPal, Android Pay, Apple Pay, or by scanning their credit card, and drivers make a small commission on the products sold.
Launched last June, Cargo recently closed $5.5 million in new funding, bringing its total amount raised to $7.3 million. The latest round was led by CRCM Ventures and Eighteen94 Capital, Kellogg Company’s venture capital fund, with participation from Techstars Ventures, Fontinalis Partners, Detroit Venture Partners, Rosecliff Ventures, RiverPark Ventures, and Chaifetz Group. Cripe praised Cargo’s investors for being especially knowledgeable about consumer goods and services.
Since its inception, Cargo says it has signed up nearly 20,000 drivers in 24 countries and all 50 U.S. states. (“We finally got one in South Dakota,” Cripe jokes.) There are also approximately 100 Cargo-equipped Lyft drivers tooling around Detroit for the duration of the auto show.
The 10-person Cargo team has big goals for 2018. Cripe says the company plans to open up shop in the top 10 U.S. cities for ridesharing—Uber’s list of top cities in terms of ride volume includes places like Indianapolis, Orlando, and San Antonio—and activate drivers on its waiting list.
“This year is all about scale and taking what we’ve built and expanding it into other markets,” Cripe explains. “We have more of a budget to test things that could be related to e-commerce or logistics, or pop-up Cargo booths if there’s a consumer-facing or operational need. We’ve also toyed with the idea of vans tweeting their location so drivers can get replenished [supplies] on the go.”
Cripe says Cargo is also working on “a cool partnership with a ridesharing company that kind of inverts our business model,” but he declined to share specifics. “We’re constantly trying to remind ourselves that it’s still day one,” he adds. “We should always be innovating.”
Cripe is excited about a world in which ridesharing keeps growing. Big consumer brands, some already partnering with Cargo (like Kellogg’s), are starting to realize they will soon need new ways to reach customers, he points out.
“As we shift toward an economy based on ridesharing and autonomy, people are going to go to gas stations less and less,” he says. “We offer a way for these companies to hedge their bets with a new distribution channel.”