Cargofy raises $2M to build an ecosystem for truck drivers
Cargofy, a Ukrainian-American startup that allows truckers to optimize their routes and take extra cargo on the way, avoiding unprofitable underloaded trips, has raised $2 million in a seed round. The round was led by JKR Investments Group, with participation from Flyer One Ventures, angel investors Murat Abdrakhmanov, Hannu Turunen, and others.
What the investment will be used for
The $2 million raised in the seed round will be used to scale up and expand the product functionality.
“E-commerce market is expected to reach $4 trillion by the end of 2021, with the logistics component accounting for 10% to 30% of costs. For example, Amazon’s transportation costs have risen from 19% to 31% over the past nine years, according to Transportation Intelligence. These data show that the market needs solutions that will help streamline the logistics infrastructure. Cargofy’s goal of making the trucking process as simple and easy as ordering a taxi is very appealing for the market. Investment in Cargofy is natural for our ecosystem and allows us to extrapolate our expertise into other markets. We are pleased with our new partnership with Cargofy and are happy to leverage our network and knowledge,” says Alexander Gusev, Co-Founder & CEO of JKR Investment Group.
In addition to cooperation with the partners, the company plans to develop a network of owner-operators drivers. There are over 350 thousand of them in the US. Since they can’t afford brand development, support, and other important things, the team implements them in Cargofy to make trucking convenient for both carriers and shippers.
“Logistics is becoming an increasingly popular industry for technological solutions — this is largely due to the size of the $5 trillion market or 6% of world GDP. In the United States, about 80% of all cargo is transported by road, while the carrier market is highly fragmented, with numerous self-employed operators. We are pleased to support Cargofy in their desire to develop a convenient unified network for self-employed carriers and transform the trucking industry into using an AI-powered freight broker’’, says Vital Laptenok, General Partner at Flyer One Ventures.
How Cargofy works
Cargofy is an AI-based personal assistant for truck owners that collects orders for drivers and offers numerous delivery options for customers.
Every day Cargofy aggregates multiple shipping options in one window and allows customers to choose the most cost-effective delivery from partner trucking companies and its network of independent truckers.
It also helps drivers to find cargo for transportation, as well as infrastructure facilities: gas stations, parking lots, service stations, with a database of more than 10 thousand objects and with exclusive discounts. Cargofy guarantees drivers a rate per mile and a monthly mileage, thus removing additional risks from carriers associated with choosing the best routes. Thus, Cargofy makes ordering trucks as simple as ordering airline tickets.
Also, Cargofy itself generates all the necessary documents for sending the goods, and you can track the transportation in real time.
Story of the startup
In 2014, the Ukrainian Stakh Vozniak and his partners created the app Tona, an Uber-like service for urban trucking. In 2017, Stakh changed the business model and, together with a new team, launched Cargofy, where transportation was between companies, not people.
After the launch, Stakh Vozniak, Cargofy CEO, Alex Kovalchuk, CTO, and Dimitris Alexiou, CMO, set out to automate processes in the freight market using technology and become a real “Siri for truck drivers.”
Initially, the team focused on a narrow segment of immigrants from Eastern Europe, made a localized application, supported in their native language, and thus formed a loyal carrier base. Now Cargofy is represented in the US and Eastern European markets, with the number of trips exceeding 40 thousand.
“We created Cargofy to simplify life for both truckers and shippers who order transportation. Cargofy helps drivers search for the nearest cargo, generates documents, calculates the ideal route, and saves up to $18,000 per year in payments to brokers! In a matter of seconds, the customer receives all kinds of delivery options from self-employed carriers, transport, and courier companies, and can choose among thousands of options the most advantageous in terms of time and price,” says Stakh Vozniak, Cargofy CEO.