That was about six years ago. Today, Britton said, Tavshikar presides over Cambridge, Mass.-based SmartKargo, the cloud-based air cargo management platform and data analytics tool that sprung forth from that casual MIT conversation. In January of this year, SmartKargo received an investment from Detroit-based venture capital firm Fontinalis Partners, LLC. The specific terms of the investment were not disclosed, but Fontinalis principal Chris Stallman said the typical range of investment by the VC firm is about US$5 million to US$8 million over the life of the startup.
SmartKargo is just one of dozens of new companies that are beginning to attract the attention of angel investors, venture capitalists and private equity firms. Much of this stems from the explosion of e-commerce around the world and the growth of “online-to-offline,” or O2O, companies such as car-sharing service Uber, which provide ultra-fast, door-to-door delivery of goods and services with the swipe of an app. Earlier this spring, Chinese mega-retailer Alibaba reached a milestone by investing roughly US$1 billion, with help from its subsidiary Ant Financial, into a restaurant and shopping O2O service called Koubei.
Nowadays, everyone in the logistics industry – traditionally one that is slow on the uptake of the latest technologies – seems to want to be the “next Uber,” where customers have more control of the products and services they buy from the “next Alibaba.”
According to a database maintained by Crowd Companies, an organization that tracks investments across various business sectors, more than $457 million was invested in logistics companies between 2011 and 2014. Companies that are attracting the largest investments tend to be the more consumer-oriented Uber-like courier services, like Shyp and DoorDash, which recently raised $50 million and $40 million, respectively, in Series B rounds, led by Kleiner Perkins Caufield & Byers, a blue-chip venture capital firm. Another startup, called Postmates, which can arrange one-hour courier service from restaurants and stores across a city, raised $80 million in a Series D round in June from Slow Ventures, Spark Capital and Tiger Global Management, increasing its total funding to $138 million since its launch.
But there are many other e-commerce startups raising more modest sums that are revolutionizing the way goods are being shipped domestically and internationally, providing end-to-end delivery services via mobile app. For instance, ShipBob, a startup from Silicon Valley’s Y Combinator incubator, raised $1.5 million in June and arranges 8,000 package shipments a month via smartphone. There’s also Flexport, a global online shipping platform, which secured a $6.9 million investment with 10 backers in 2014.
“There’s a tremendous opportunity for later-stage companies right now to find funding in logistics,” Stallman said. “We’re on the cusp of another wave of investments right now in this sector.”