Union Square Ventures led a $12 million Series A financing round for SmartHop, a trucking dispatch company. RyderVentures — a new corporate venture capital fund by Ryder System — Equal Ventures and Greycroft participated in the financing round.
The investment comes less than a year after SmartHop’s $4.5 million seed round, bringing SmartHop’s total funding since its 2018 launch to $16.5 million. The company will use financing from its Series A round to continue investing in its dispatching platform, to grow its team and to seek strategic partnerships to support small trucking companies.
In 2019, 72.5% of all freight transported in the U.S. was hauled by trucks, equating to 11.84 billion tons, according to the American Trucking Association. The vast majority of trucking companies — 91% — operate six or fewer trucks, and these smaller trucking businesses have been strained due to ongoing driver shortages and tighter capacities resulting from the COVID-19 pandemic. Additionally, most small/independent owner-operators only have access to loads in the spot market, the 20% of the trucking market in which rates are based on current supply and demand for trucks on one-time or inconsistent load volumes. These loads are typically networked across dozens of impersonal brokers and low-quality load boards, leading to a fragmented market where inefficiencies, a lack of accountability and wasted resources fall disproportionately on small owner-operators.
“The past year was an especially challenging one for small and independent truckers, essential parts of the country’s economy who already were facing significant challenges in competing against large carriers and high rates. We created SmartHop to help these businesses thrive, and the need for our platform is stronger than ever today,” Guillermo Garcia, co-founder and CEO of SmartHop, said. “This fundraising round will enable us to continue growing our network and enhance our product and team to meet the urgent and evolving needs of small owner-operators so they can retain the control and freedom that brought them to the trucking market.”
SmartHop was founded by Garcia, who worked as a pet food delivery driver and turned it into a 500-person trucking company in his native Venezuela before immigrating to the U.S. He attended Columbia business school, built a small carrier service in Miami and eventually launched SmartHop in 2018.
“Ryder established a corporate venture capital fund late last year to identify new technologies and companies addressing pain points in the industry and to help bring their solutions to market quickly. We’ve kept a close eye on SmartHop since its founding and have been impressed by both their technology and their approach to addressing the challenges of fleets,” Karen Jones, chief marketing officer and executive vice president of new product innovation at Ryder, said. “As the first investment through RyderVentures, we are firm believers in Guillermo’s vision for SmartHop and are eager to both invest and collaborate to bring Ryder’s 90 years of experience in logistics to support the SmartHop team’s success.”
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