A new San Diego unicorn: Flock Freight scores $215M for tech that transforms truck shipments
Softbank Vision Fund 2 leads the funding round for Encinitas-based firm’s technology that pools truckloads for faster delivery and smaller carbon footprint.
Flock Freight, an Encinitas trucking logistics firm that aims to revolutionize the way freight moves across the country, has landed another $215 million in venture capital — making it San Diego’s latest startup unicorn.
The funding round, led by Softbank Vision Fund 2, comes on top of $113.5 million raised by Flock Freight in December. The company now joins Seismic, Tealium, Shield AI and ClickUp as local, privately held startups with valuations topping $1 billion.
Flock Freight said the money will go toward advancing its patent-pending shared truckload platform. The marketplace taps cargo pooling and probability pricing algorithms to combine small amounts of shipped products into a shared full truckload — akin to a carpool for freight.
Founded in 2015, the company has experienced accelerated growth since January 2020, said founder and Chief Executive Oren Zaslansky. “We’re a six-year overnight success story. We are now doing hundreds of millions in revenue, I think it fair to say, and employing 325 people as of today.”
Flock Freight uses technology to pinpoint less-than-full truckloads that are headed in the same direction. In its marketplace, it then finds loads to fill these trucks based on the fastest routes and first-in, last-out loading requirements.
It also has a pricing engine that allows partial truckload shippers to pay for only the amount of truck space that they use —with the price ranges based on the likelihood that other shippers will emerge to fill the rest of the truck.
“We are changing the rules,” said Zaslansky. “We are the only company in the world that uses technology to fundamentally change the way freight moves.”
Flock Freight’s technology increases efficiency and therefore reduces the carbon footprint of shipping, according to the company. It estimates more than 15,000 tons of emissions have been cut to date because of its technology, and it is on track to exceed its goal of 20,000 tons of CO2 emissions savings in 2021.
The new funding brings the total amount raised by Flock Freight since inception to just under $400 million.
“We believe Flock Freight’s technology has demonstrated the unprecedented ability to pool shipments in real-time, maximize trailer utilization, and reduce waste — while delivering high service quality,” said Andrew Straub, investment director at SoftBank Investment Advisers. “We are pleased to continue our support of Oren and the Flock Freight team as they aim to reinvent freight shipping.”
The freight business is enormous, said Zaslansky. It generally is split into two categories — shippers looking to transport less-than-full truckloads of goods, and those seeking to ship full truckloads.
The less-than-full truckload category typically uses a hub and spoke system, where goods are trucked to terminals, unloaded and then reloaded again on different vehicles until they reach their destination.
The result is high costs and long transport times, said Zaslansky. With its pooling marketplace, Flock Freight contends less-than-full truckload shipments arrive faster and stay on the same vehicle, avoiding possible damage from being unloaded.
For full-truck transport, shippers sometimes pay for the entire truck even if it’s not completely full, said Zaslansky. That’s happening more often as pressure builds to get goods from the docks to empty store shelves following the pandemic. Flock Freight’s technology allows shippers to add their cargo to any empty truck space along the way.
Along with Softbank Vision Fund 2, Susquehanna Private Equity Investments and Eden Global Partners joined this latest funding round. Existing investors, including SignalFire, GLP Capital Partners and GV (formerly Google Ventures,) also participated.
“The company is truly disrupting long-standing shipping processes by leveraging a best-in-class management team and technology that overcomes the complexity of pooling freight,” said Dean Carlson of Susquehanna.
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