TruckSmarter comes out of stealth with a free load board for truckers
Technological innovation has caused a rise in e-commerce that is crying out for more truck drivers to deliver our smartphones and Pelotons and pineapples. But the trucking industry, the backbone of all our hedonistic spending, has yet to see the same level of tech advancements needed to create a stable and resilient supply chain.
The industry is incredibly fragmented, with truckers, a large majority of whom are owner-operators, spending hours of their day searching for brokers and shippers who will give them their next gig. And when they find it, they’ll spend almost half their time sitting idly in clogged ports waiting to be loaded or unloaded — a task that is probably as boring as it is detrimental to a trucker’s bottom line, according to Daniel Kao, co-founder and CEO of TruckSmarter, who says truckers largely get paid on a per-mile basis.
The ability to use the service for free is one of the things that differentiates TruckSmarter from the number of other trucking software platforms that are springing up to address the outdated, yet crucial, industry. CloudTrucks, SmartHop and Convoy have all launched in recent years to help connect truckers, carriers, shippers and brokers. They each offer a dispatch service or schedule optimizer, which TruckSmarter doesn’t yet, but there’s a reason for that.
“CloudTrucks is a virtual fleet, so their core business is being a carrier, and I think for drivers to be in their ecosystem, they have to give 15% of their revenue to move a load — which is a lot better than the industry standard of 30%, but you just end up being a driver for them,” said Kao. “Compared to that, our belief is that truck drivers want to own their own business and make as much revenue as they can — like the American dream of buying your own truck, running your own business and doing your own accounting with TruckSmarter.”
While TruckSmarter’s load board is free, the company makes its revenue by offering truckers same-day payments for each load. Truckers normally have to wait 30 to 45 days after a load is completed to get paid, which means they often front the bill for gas, maintenance or repairs, says Kao. TruckSmarter takes 1.5% off a load’s revenue for same-day pay, but based on the current and future scale of the platform, that small factor collectively turns into big bucks for the startup.
In the year TruckSmarter has been operating in stealth, the startup has brought on about 100,000 active users spending no money on marketing, according to the company.
“We’re already facilitating over $1 billion annualized just through our platform alone,” said Kao, who also noted the company is doing millions in loads per day. If every driver chooses same-day payment, TruckSmarter could pull close to $5.5 million in easy revenue each year. Basically, the company is betting on the psychological effects of delaying gratification, and as the marshmallow test taught us, it’s human nature to take the less desirable treat if we can have it immediately, rather than wait for the more desirable treat.
TruckSmarter is coming out of stealth with $44 million in funding to date. The company recently closed a $25 million Series B, which was led by Thrive Capital, with participating investors like Founders Fund, a16z, Bain Capital Ventures and Fin Capital. Some big tech names also signed on, like Tony Xu, CEO of DoorDash; Ryan Petersen, CEO of Flexport; Eric Glyman, CEO of Ramp; and Jett McCandless and Jason Duboe, CEO and chief growth officer of Project44, respectively.
Source: TechCrunch
