NEA Leads $42M Round For AI-Enhanced Freight Booking Startup Transfix
Transfix, a New York tech startup with an online marketplace that organizes freight truck shipments, says it has scored $42 million in a Series C financing round led by New Enterprise Associates (NEA).
Transfix, founded in 2013, relies on machine learning and other data analytics tools to distinguish itself in the crowded arena of freight booking management—–a legacy blue-collar field that’s now becoming a battleground for artificial intelligence software companies. That interest may be intensified because AI-powered trucks, and self-driving trucks, could some day be part of the tech-driven trucking landscape.
Startups like Transfix are vying with entrenched leaders such as Lowell, AR-based J.B. Hunt (NASDAQ: JBHT), and Eden Prairie, MN-based C.H. Robinson (NASDAQ CHRW), a global third party logistics provider.
Meanwhile, e-commerce giant Amazon may be taking steps toward expanding its shipping management expertise into freight hauling, and transportation tech company Uber is also interested, the Wall Street Journal reported in December.
In addition to NEA, other VC firms based in Silicon Valley and New York are backing Transfix. Canvas Ventures and Lerer Hippeau Ventures joined in the Series C funding round for the company, which has also been funded by Founder Collective and Bowery Capital. Transfix’s total fundraising now comes to $78.5 million, and its employee count is about 110.
NEA managing general partner Scott Sandell, in a written statement, said the long-haul trucking and logistics industry “remains incredibly fragmented and opaque, and has not yet enjoyed the benefits of technology and innovation like most other industries.”
Transfix’s founder and CEO Drew McElroy, who grew up in a family that operated a freight brokerage, teamed up with co-founder and CTO Jonathan Salama to bring data analysis and automation to the task of matching shippers with carriers efficiently.
Transfix, which has a mobile app and a website, allows retailers and manufacturers to post their outgoing loads, state their rates, and receive bids from truckers who meet Transfix’s standards. The transaction can be completed online without a phone call. The site allows shippers to track their cargo and receive alerts if there’s a delay. Shipping customers pay recurring subscription fees for access to the tracking and planning software.
On the carrier side, the automated marketplace aims at offering truckers the loads that follow their preferred routes, or at putting together pairs of loads headed for similar destinations. Transfix also tries to find them loads they can pick up on their way back, so they don’t bear the cost of running an empty truck. Carriers pay Transfix a fee for truckloads booked, McElroy told Xconomy in an e-mail exchange.
“By using automation and machine learning to match loads with carriers, we can do this at a low rate compared to traditional brokerages, and providing value to both the carriers and shippers,” McElroy wrote.