The shipment has long been one of the most outdated, and least technological, segments in the business world, with its physical aspects – rooted in massive cargo tanks, giant fleets of aircraft and trucks, and connected container trains. – highlight some of the most obvious analog attributes of the company.
This has also made it a mature opportunity for startups, and today, a call PayCargo, which has built a series of cloud-based payment and financing services for the cargo industry, announced $ 35 million in funding to expand its business after Covid-19.
The investment comes from a single high profile investor, Insight Partners, which in April announced a monster $ 9.5 billion bill which he planned to use not only to support portfolio companies through the global health pandemic, but to look for new emerging opportunities in the future.
PayCargo seems to be one of the last. Eduardo del Riego, the CEO (PayCargo was co-founded by COO Juan Carlos Dieppa and President Sergio Lemme), said that while the cargo industry has faced a lot of turmoil with the pandemic – production in some places is finally, social media and rules created new challenges for how shippers could work and move physical goods – he also highlighted how solutions like PayCargo were essential to making things work well as well.
“With COVID, there was tremendous uncertainty about the impact of the global supply chain,” he said in an interview, “and like many other industries, the pandemic has accelerated the need for and demand for a solution. without card and without contact, which in turn has accelerated PayCargo’s business. ”
And while many of us are preparing for more repercussions on how the global economy is shrinking, PayCargo is profitable and has been since its inception, the company said, and has been growing – what for it could be a positive signal on how the production is even picking up again.
PayCargo provides a platform that offers tools for payers to send payments, sellers to receive them, APIs to integrate profits into an existing IT, and financing services for those who don’t want to pay for forward shipments. All of these, for most of those working in this space, are still fixed in documents and can take weeks to resolve, making them a prime space to deal with electronic services.
Today, PayCargo transforms $ 4 billion annually into payments from about 12,000 shippers and carriers and a network of 4,000 vendors – customers travel by land, sea and air and include Kuehne + Nagel, DHL, DB Schenker, BDP, Seko Logistics, UPS, YUSEN Logistics and vendors such as Hapag-Lloyd, MSC, Ocean Network Express, Alliance Ground, Swissport, and AirFrance – with a transaction volume up more than 80% over last year. Through its APIs, PayCargo also works with a number of partners to serve customers, including the International Air Transport Association (IATA), Cargo Network Services (CNS), CHAMP Cargosystems, IBS, Accelya, Unisys and Kale Logistics.
We wrote earlier about the highly fragmented and analog freight industry, which also bases many transactions around faxes, current documents physically exchanged between parties, people transferring not only goods but documents hand in hand. The same goes for the payment infrastructure that supports everything.
This has generated a number of other startups seeking to address the market with technology. Emerge has built a digital market specifically for the truck industry, meanwhile Cargo.com is intended for air transport; Europe Zencargo, FreightHub and Senender they have focused on cloud-based infrastructure in transportation forwarding (and Sennder is positioning itself as a consolidator in this market, acquiring little to do Uber’s European business in this area); and Flexport if positioned has one to look at in its own SaaS shipping port.
PayCargo itself also has a number of competitors, which could include those building larger suite of services, of which Payments is only one. In addition to all that we have covered, there is GlobalTranz, CloudTrade and others. (Del Riego has refused to directly nominate any competitors. “PayCargo is the first and most robust solution on the market,” he said flatly.)
Overall CrunchBase estimates that a few $ 5.5 billion has been invested in transportation-related technology companies looking to bring more up-to-date processes to what is, at the end of the day, ultimately a very physical affair.
But with industry significantly bigger than that – an estimate forecasts that the U.S. transportation logistics market alone will be worth $ 1.3 trillion by 2023 – you can see how building and tackling that would be a lucrative opportunity.
“As the charging industry rapidly changes to electronic payments, PayCargo has established itself as the market’s leading platform for doing business by successfully automating the payment process and ensuring efficiency for both payers and customers alike. sellers, ”Ryan Hinkle, MD at Insight Partners, said in a statement. “We are excited to work with PayCargo to continue to scale its global payment network and through our ScaleUp Insight Onsite team and operating experts, we are helping to bring additional resources to its impressive customer list.” Hinkle joins the board this round.