Deal focus: Freightos looks to take shipping digital

Israeli entrepreneur Zvi Schreiber discovered the world of international shipping was incredibly old-fashioned on becoming CEO of Lightech, which made electronic power supplies for LED lights. The company shipped its China-made products to the US and Europe by air and sea, and Schreiber would often wait four days for a basic price quote from logistic companies. Seven years on, the industry hasn’t changed.

“It’s also hard to know whether you’ve got the best price or not – import and export companies can end up paying 30% or even 100% more for their shipments,” he says. “It’s very strange. When you buy a plane ticket to travel from one country to another, you can see all the prices online. It has been this way for more 20 years. It’s time people bought shipping services online as well.”

Following the sale of Lightech to a division of General Electric (GE) in 2011, Schreiber founded logistics technology company Freightos in Hong Kong. Its flagship product is software-as-a-service (SaaS) AcceleRate, which enables carriers, freight forwarders and shippers to automate pricing and routing. Last year, it introduced a marketplace that provides instant price quotes for freight forwarders, which has already accumulated 10,000 registered users. Freight forwarders pay Freightos a finder’s fee equal to 2% of the overall transaction whenever they generate business through the marketplace.

The company raised an equity crowdfunding round in 2012. This was followed by $15 million in Series A funding in 2014 and a $14 million Series B in 2015. The latter round featured existing investors Aleph, Annox Capital, ICV and OurCrowd, as well as MSR Capital and Sadara Ventures. Last week, Frieghtos added GE Ventures to roster as the investor led a $25 million extended Series B round. Schreiber says he wants to continue working with GE, which he describes as an important strategic investor for Freightos.

“Since GE is an industrial company we hope it will start using Freightos’ marketplace to order shipments. Their vision is to become a digital industrial company, and logistics digitalization is an important part of it,” Schreiber adds.

Freightos’ services are underpinned by a freight pricing and routing engine as well as a database of more than 300 million ocean, air and land freight price rates. The database, which is updated daily, is growing by over 10 million price points every week. While Freightos works with more than 1,000 logistics providers that have worldwide coverage – including the likes of Nippon Express and CEVA Logistics – most of the exporters and importers who access freight forwarders through the company’s platform are based in the US.

The new capital will be used to scale the marketplace globally, with a particular focus on Europe and Asia. “International shipping generates about $1 trillion in revenue per year and right now 99.9% of that market is offline operations. We believe we’re the leading online player,” Schreiber adds.

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• Topics
• Greater China
• Early-stage
• Technology
• Hong Kong (China)
• Logistics
• GE Ventures
• Venture