GoFreight raises $28 million in Series A funding led by Flex Capital and Headline
- ByStartupStory | November 14, 2022
Flex Capital and Headline co-led a $23 million Series A funding round for the Los Angeles and Taipei-based GoFreight . LFX Venture Partners, Palm Drive Capital, as well as returning investors Mucker Capital, Cornerstone Ventures, and Red Building Capital, took part in the round.
With software that enables clients to manage their shipments, freight forwarder Unicorn Flexport is transforming the logistics industry. However, there are still tens of thousands of smaller freight forwarders, many of which use spreadsheets or out-of-date ERP software. By offering the “Shopify of freight forwarding,” backend software that streamlines their operations, and a frontend that enables them to set up a storefront and provide quotes in a matter of minutes, a startup by the name of GoFreight hopes to help them compete.
GoFreight helps manage the shipment of commodities by land, sea, and air routes and now serves roughly 1,000 clients. Additionally, it enables them to quickly establish up online marketplaces. Instead of the usual 24 to 48 hours, prospective clients can contact freight forwarders by sending them an inquiry through the storefront and receiving a quote right away.
An EDI-integrated, real-time tool can be used to track shipments once a freight forwarding job has begun, enabling both freight forwarders and customers to know precisely where their shipment containers are. On the GoFreight platform, tracking software also integrates with accounting tools so users can see how the success of shipments affects their earnings.
Before moving back to Taiwan to work for TSMC, co-founder and CEO Trenton Chen completed his PhD and Master’s degrees in the United States. Because AppWorks and other startup initiatives were gaining a lot of attention at the time, Chen made the decision that he wanted to create his own business. He gave himself six months to come up with a workable idea after leaving TSMC (“it was a tough decision because no one agreed with that,” he told TechCrunch). One of his co-founders at the time was residing in Los Angeles and working as an importer for a family company.
“I knew a lot of people in this profession back when I was in the United States. So many of our close friends urged us to visit and evaluate the app’s shortcomings. So, in the final month of my six-month trial period, I made the decision to give it a shot and purchased a ticket for a three-month trip to Los Angeles to meet with the top 10 freight forwarders and observe how they conduct business using the software. After our first week there, we established GoFreight, “Chen said.
Even though, according to Chen, the global market for freight forwarding is worth about $280 billion, almost all of the software that powers it is dated.GoFreight wants to provide traditional freight forwarders with the same level of cutting-edge technology that Flexport does in order to help them remain competitive. The logistics of moving cargo from point A to point B are the focus of a freight forwarding company. Although software can be very helpful, it is not their primary business. The software cannot help reduce shipping costs or speed up delivery because the service itself is the main business. But it can undoubtedly assist in giving customers, importers, and exporters more valuable information,” Chen said, adding, “We try to empower incumbents to compete with Flexport. That strategy aims to improve and speed up the entire industry.
According to Chen, GoFreight stands out from other startups developing freight forwarding software because the majority of them are attempting to develop new ERP systems or integrate with already existing ones. Due to the fragmented industry and widespread use of outdated ERP systems by freight forwarders, this is a difficult task. Others rely solely on spreadsheets or pen-and-paper systems, not even using ERP systems.
GoFreight’s software has sales, operating, and accounting tools on the back end, allowing freight forwarders to enter customer inquiries into their system and then respond with a quote. GoFreight handles bookings, real-time shipments, and any required electronic filings once a job is confirmed. Through GoFreight, they can also create and send invoices. In particular, Chen said, “We’re attempting to become the Shopify of the space so that they can open an online store with a single click and their importers can use the online web portal to send an inquiry and it just pops up in the system, automatically with pricing and they can book their tickets online.” Therefore, the front-end application is crucial, and we also offer visibility solutions.
The process of generating quotes, which can take a few days because freight forwarding orders are complicated, is a significant issue that GoFreight wants to address. For instance, freight forwarders must consult with overseas agents who are also freight forwarders if a customer wants to ship three containers from Shanghai to Los Angeles. They also need to set up warehouses and trucks. Spot rates versus contract rates should also be taken into account because spot prices can be significantly lower.
A centralised customer-facing app allows freight forwarders to complete the entire process, including checking with overseas agents, through GoFreight’s integrations. According to Chen, this reduces the process from two days to roughly 10 or 20 seconds. The majority of this work is currently done through emails, phone calls, and text messages. In collaboration with partners, GoFreight is currently developing a network that links customers and freight forwarders, as well as freight forwarders and carriers.
Since paper checks were the most common form of payment until recently, GoFreight also offers a digital payment solution. As a result, freight forwarders can send their clients a link that, when clicked, takes them to the GoFreight website, where they can choose which invoices to pay with credit cards or bank accounts. The ERP system of GoFreight is then updated with the new data.
According to Chen, GoFreight’s analytics can assist freight forwarders to increase their revenue. For instance, GoFreight will keep track of how much they paid for a 40-foot container and how much customers were charged. In order to give freight forwarders a better understanding of the true cost of a shipment, the system analyses the performance of top clients and international agents, revealing hidden fees. Additionally, it breaks down shipping prices per SKU so that both freight forwarders and their clients are aware of the exact cost of a shipment.
More features including smart quotations, rate management, and purchase order management will be created with the help of the new funds. Headline partner Tom Gieselmann made the following statement about the funding: “GoFreight’s all-in-one software provides greater transparency to freight movement, allowing freight forwarders to better manage their business, which can range anywhere between 0-1500+ users, end-to-end. One of the main reasons we’ve named them as one of the most promising logistics tech companies on the market is because of how versatile their product is.
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