Cargomatic

Market position

Cargomatic describes itself as the first and largest marketplace for local freight and the largest, most automated marketplace for local LTL. Independent reporting places it among a cohort of roughly 27 load-matching startups that had raised more than $180 million in venture backing since 2011, alongside Otto, Convoy, Transfix, Cargo Chief and Trucker Path. The Series B release sized US local trucking at $70 billion, noting small-fleet trucking companies handle 80 percent of metropolitan deliveries; Business Insider cited about $77 billion in annual revenue for short-haul LTL journeys of 200 miles or less and roughly 500,000 US trucking firms.

Company materials emphasize coverage of 100% of the top 20 US ports, a large daily driver pool, deep integrations across terminals, steamship lines, TMS, rail, billing and ERP systems, claimed first-to-market 80%+ touchless freight, and AI plus location-based matching to reduce deadhead miles and emissions. The 2018 Series B announcement cited standardized driver onboarding and rapid deployability into new markets as key differentiators, alongside a combination of mobile and enterprise technology with logistics support for short-haul trucking.

Technology

A web platform and mobile applications support real-time load matching and tracking, driver pre-verification and standardized onboarding, and a documented REST-style API for shipment creation and integration into customer systems. The company cites artificial intelligence combined with location-based matching to reduce deadhead miles, smart routing and multi-shipper load bundling, and integrations with terminals, steamship lines, TMS platforms, rail lines, billing systems and enterprise ERPs.

Go-to-market

Cargomatic sells directly to shippers ranging from top US importers to startups moving a first pallet, and recruits carriers and owner-operators through a 'Drive With Us' channel. It publishes an API for integration into customer platforms and pursues partnerships with steamship lines, airlines and freight forwarders. Marketing includes a blog, industry news content, trade-show presence and an email newsletter.

Shippers needing local and regional freight movement, including top US importers, manufacturers, retailers, third-party logistics providers, direct-to-consumer brands moving heavy or high-value goods, and startups shipping small volumes; on the supply side, trucking fleets, owner-operators and professional drivers seeking loads.

Geography

Headquartered in Long Beach, California (earlier reporting placed the company in Venice/Los Angeles). At the time of the 2018 Series B the company operated in Los Angeles, San Francisco, Chicago, Florida, Seattle, Dallas, Houston and New York. The company states drayage coverage across the top 20 US ports in the continental United States, including the Ports of Los Angeles and Long Beach.

History

Cargomatic was founded in 2013 by Brett Parker and Jonathan Kessler and initially based in Venice/Los Angeles, California. It raised an undisclosed seed round from Acequia Capital in April 2013 and a $2.6 million seed round in June 2014 with Canaan Partners, SV Angel, Acequia Capital, Structure Capital, Sherpa Capital and Winklevoss Capital. In 2015 the Port of Los Angeles tested the service. By 2016 the company had entered a difficult period: it had burned through nearly $15 million in investor money and bank loans, laid off more than 50 employees (about half of staff), and lost its CEO, CFO and COO, while reportedly relying on manual data entry and a single major customer. Wikipedia reports that at the close of Series A funding in 2016 the company had raised $20.8 million in total. Under CEO Richard Gerstein the business rebuilt and closed a $35 million Series B led by Warburg Pincus in August 2018, with Canaan, Genesee & Wyoming, Xplorer Capital and Muse Family Enterprises participating. The company is now headquartered in Long Beach, California.

Risks & controversies

A September 2016 Business Insider article reported that Cargomatic burned through nearly $15 million in investor money and bank loans while deliberately running at a loss, laid off more than 50 employees (about half of staff), lost its CEO, CFO and COO, struggled to raise funding, and quietly pivoted away from full automation to a model dependent on manual data entry by staff, with the business at that point reliant on a single customer. The Wall Street Journal similarly characterized the 2018 Series B as funding a rebuilding effort after a rocky startup period marked by cash burn and employee departures.