Shipping logistics solutions company FreightPal Technologies plans on raising funds in the near future to hire staff and roll out its technology. That’s good news for private investors. The company could be ripe for acquisition by a bigger company.
Right now, FreightPal is taking reservations for its next equity crowdfunding round. Today I’ll share why the company may be a good way to invest in an industry that is in desperate need of a reboot…
Look, the shipping industry needs help. If it wasn’t clear before, the Covid-19 pandemic only brought it to light.
Ports are jammed. Workers are scarce. Consumers are witnessing empty shelves and rising prices as a result.
It’s a mess.
As reported by the Financial Times, DSV CEO Jens Bjorn Andersen describes the situation as one of the worst he’s seen after more than three decades in the logistics industry. DSV is one of the world’s largest logistics groups.
While there is some hope, some experts say the supply chain issues caused by Covid-19 could last another couple of years.
Venture capital expert Cody Shirk says, “This whole crisis highlights a very interesting opportunity for entrepreneurs and investors.”
Private Money Pours Into Supply Chain Technology
As Cody reported, Encinitas, Calif.-based Flock Freight closed a $215 million funding round in November. The round was led by the world’s largest venture capital fund: SoftBank (OTCBB:SFTBY).
Flock Freight’s technology optimizes shared truckloads to “improve on-time delivery, reduce damage by 100X, and eliminate your freight’s carbon footprint.”
With the most recent funding round, the company’s valuation sits at $1.3 billion. This makes Flock Freight a “unicorn” (a privately held startup valued at over $1 billion.)
The truth is that logistics is ripe for much more disruption by tech-enabled platforms. And it’s likely that the industry will see some enormous transactions in the private market over the coming years.
That spells HUGE profits for investors who want to back privately held logistics companies right now.
Enter FrieghtPal, a shipping logistics company with a technology that could help save big companies a lot of time… and money.
FrieghtPal’s Big Opportunity
Founded in 2013, FreightPal was originally “developed to compare price quotes, book, track, manage, bill, and pay shipments online with all major integrated carriers.”
You see, right now 95% of freight transactions are made manually. This makes it a very complicated business.
FreightPal wanted to make the job of comparing and placing shipping orders easy.
And the company succeeded. Right now FreightPal has more than 200 customers, including Old Dominion Freight Line and GlobalTranz.
In 2020, the company pivoted from a digital freight brokerage to a technology licensing model.
Now FreightPal offers technical integrations of the its services to customers through external application programming interfaces (APIs).
The digital freight brokerage service becomes a business development driver for the technology licensing business. This allows us to onboard customers with simple transactions, which leads to more advanced technical integrations.
The company expects to see a dramatic rise in gross margins over the next 12 months.
As cited on its deal page, the digital logistics market is expected to have a compound annual growth rate (CAGR) of 21.7% from 2020 to 2025.
And North America is the fastest-growing market. In 2020 the industry was valued at $17.4 billion. It is projected to grow to $46.5 billion by 2025.
FreightPal Technologies’ Next Funding Round
FreightPal plans to use funds raised in this round to hire staff to help roll out its “new technology-driven SaaS, API, and Intelligent Recommendation Engine (AI) products.”
This is all in preparation for the company to raise an Institutional A round, hopefully within the next year. (An Institutional A round is usually the first time a company gets a third-party valuation, usually from a venture capital firm.)
The most likely exit for early investors will be a merger or acquisition. If all goes well, FreightPal hopes to be acquired by a large third-party logistics (3PL) or transportation company.
Right now, FreightPal is testing the waters through Republic’s crowdfunding platform. If you are interested in investing in FreightPal, you can make a reservation, or pledge, for the next funding round through the site here.
(Reserving a spot today does not obligate you to invest when the next round of funding opens. What it does do is put you first in line when the time comes. As with any type of investing, private investments do carry risk. When you invest in private companies, your money can be tied up for an extended period of time. You should never invest money you can’t afford to lose. Before you invest, check out risk factors you should be aware of on Republic’s site here.)
On this date of publication, Jessica Zeller did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Investing in startups through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks
Jessica Zeller has spent over a decade following the financial markets and bridging the gap between retail investors and complex investment strategies. Her focus has been in technology and high-growth investment strategies.