If you are a founder and started a startup before an epidemic hit in the last February of 2020, you might feel as if you were living the ultimate business nightmare. But if your company undertakes to stabilize the supply-chain business, then, in reality, you must have hit the ground running at the right time. So is the story of a Miami based startup Smarthop, An AI-powered app that helps interstate truck drivers make their routes more efficient and attractive while eliminating a lot of administrative hassle for drivers.
Smarthop announced today that it raised $ 12 million in a Series A round, raising the company’s total funding to $ 16.5 million. The round was led by Union Square Ventures, whose previous investments include Stripe, Twitter, Coinbase, Etsy, Meetup, Skillshare and Duolingo.
SmartHop takes a complex problem with a lot of moving parts and provides a simple solution. To understand the differences in the market, you need to understand the obstacles facing truck drivers. And since Garcia is a former truck driver (he was a pet food delivery driver while in college in Venezuela and gave his business to a 500-person trucking company), he has a good grasp on pain points and the intricacies of the industry.
“I lived with my parents in Caracas and I asked my parents to vacate my garage and this was my first distribution center,” said Guillermo Garcia, CEO and co-founder of SmartCop. “The trucking market operates like a stock market,” he said, explaining that it is ever changing and therefore impossible to predict.
According to a 2019 study American Trucking Association, The trucking industry is a $ 791.7 billion industry, representing 80.4% of the country’s freight bill. Additionally, 91% of trucking companies are small businesses, meaning they have six trucks or fewer. There are many owner-operators. Traditionally, to get the load, truck drivers had to scour the apps or websites of about 15,000 different brokers. It was a total unmodified, unskilled, free-for-all approach that left drivers unable to estimate monthly revenue, among many other things.
This smarthop helps those drivers. Suppose Bob lives in Atlanta and has the same truck; He is an owner-operator. He has a load that is about to take him all the way to Seattle, and it will take several days to get there. Financially, it is incomprehensible for Bob to know what else he can do without starting the trip, or if Seattle should really be his turnaround point. There may not be much cargo going out of Seattle these days, but a lot is happening outside of Chicago. Bob has no way of knowing these things.
Before Smarthop, Bob had to pick up the phone, call brokers and make deals. Much of this work was done while on the road and Bob had no foresight for his next few weeks of work – or in life, for that matter.
With SmartHop, Bob can enter details about his truck’s capacity, cities he doesn’t like driving and other details, and SmartHop would recommend loading it that optimizes his profits and travel time. Think of it like when you are using Waze and asking if you want to drive to Starbucks because it is for a few minutes. That’s all you need to do, and Waze does the rest. SmartHop operates in a similar way.
“Some truck drivers don’t like driving in New York City because there’s a lot of tolls, bridges, and traffic,” Garcia said, “so it doesn’t matter the value of the load, it’s not going to take it,” he said. Added.
But if you really want to go full autopilot, SmartHop can take loads on you and book loads for you autonomously – all you have to do is drive and take care of the truck.
The more smarthop a truck driver uses, the more the company learns the driver’s preferences and makes better suggestions or bookings.
SmartHop charges a transaction fee of 3% of gross sales. “Gracia said,” Our incentives align a lot, so when they make money, we make money, and when those days are running out, we don’t charge anything.
“[Union Square Ventures] The focus is on businesses using technology to build networks and broaden reach. “We were especially excited to meet Guillermo and the SmartHop team, because that’s what they’re really doing – letting the software owner-operator trucking company optimize their business and compete with the sheer number of players Gives authority. “
Miami’s logistics company Rider also participated in the round through its new venture arm, Rider Venture. Smarthop is its first investment. Equal Ventures and Grecroft also invested from SmartHop’s seed round.
“A lot of startups have great technology and there’s no one to test on it,” said Karen Jones, Rider’s executive VP, CMO and head of new product innovation. “And the software doesn’t go very far if no one tries to do it in the real world.” Prior to the RyderVenture investment, Ryder partnered with SmartHop to test the product on their own trucks, of which they have 275,000.
The company, which was part of the 2019 New York City Techstar cohort, currently has 50 full-time employees and 100 trucks using the product. Each truck, on average, gross between $ 10K – $ 15K per month.
The latest financing round will go towards product development as well as embedded financial products. Unlike larger companies, smaller trucking companies do not have the benefit of negotiating better rates on fuel or insurance, but with the amount of smarthop drivers, this can change. Additionally, they will offer factor invoices, so that drivers can sell 45-day invoices and pay by Smarthop within just 24 hours. Garcia said, “Because we have so much data, we have become the ultimate underwriter, so I can already be smarter and smarter.”