Some areas of the global economy remain remarkably untouched by digital transformation. If you want to book a flight to another part of the world, countless websites and apps will help you find the best option. If you want to ship goods to another country, however, be prepared for some old-school shopping around, with lots of phone calls required to find the cheapest or quickest deal.
Enter Freightify, which is today announcing the completion of a $12 million funding round. It believes its technology will transform the global freight industry in the same way as adjacent industries have been digitally disrupted.
The Singapore-headquartered business focuses on the freight forwarding industry – the several hundred thousand freight forwarders worldwide that arrange shipments on behalf of their customers with the world’s largest freight businesses. Think of freight forwarders as middlemen who strive to get customers the best deal from the actual shipping companies, navigating complexities such as the cultural, linguistic and financial differences between markets worldwide.
“Freight forwarders are the backbone of global trade,” says Raghavendran Viswanathan, the CEO and founder of Freightify. “It’s a fragmented and localised industry, but these businesses are the glue that holds the whole trade ecosystem together.”
Right now, however, freight forwarding businesses operate in a frustrating world. When a customer asks for advice on how to ship freight from one location to another, the freight forwarder has to ring round all its contacts at leading freight companies in order to check pricing and availability. It can take two days to get back to the customer with a quote for the shipment, with no guarantee it will get the business.
Freightify’s solution is a platform of tools that enables an experience much more akin to what customers would expect from Expedia or Booking.com. It enables freight forwarders to offer a digital solution to their customers. A customer seeking information on how to make a shipment inputs their requirements online; within seconds, the platform provides a list of quotes from freight companies able to accept the shipment.
To deliver that service, Freightify has worked with the world’s largest shipping companies, linking its platform to them via APIs to enable real-time and automated checking of their prices. “For too long, freight forwarders have been restricted to spreadsheets and legacy processes to do business,” says Viswanathan. “We set up Freightify to remove the heavy lifting of manually providing quotations.”
Freightify’s team enables freight forwarders to offer digital pricing
What the system can’t yet do is accept actual bookings – the shipping companies aren’t quite ready to work in that way. But that will come in the months ahead, along with additional functionality such as the ability to track shipments in real-time once they’ve been dispatched. “The industry is still catching up, but it’s moving quickly,” Viswanathan adds.
Nevertheless, Freightify’s achievement so far has been to enable freight forwarders to offer instant quotes to customers looking to ship goods, rather than requiring them to wait several days. That massively reduces their costs, as well as improving customer service. “Freight forwarders using Freightify save more than 70% of the time spent on manual tasks and legacy processes, while halving the operational costs of doing business,” Viswanathan says.
The freight giants are also eager to play their part, because Freightify’s platform offers them a means to roll out new digital operating models and solutions. And in an industry that moved to much more dynamic pricing in the face of the Covid-19 pandemic, the platform ensures the sector can continue to work in that way.
It’s a value proposition that has seen more than 200 freight forwarding companies in 45 markets worldwide sign up to use Freightify’s platform since the business was founded in 2018. Each one pays an annual license fee to use the technology, with tiered pricing according to the number of users and offices that the freight forwarder has. Revenues at the company have tripled over the past year.
More than two-thirds of the company’s sales currently come from European and North American freight forwarders, though Freightify operates worldwide. The company now plans a major expansion in Europe in particular, putting more staff on the ground in key markets such as Denmark, as will as investing in sales and marketing.
The additional financial firepower that today’s fundraising brings will certainly help in that regard. Freightify has raised $12 million of debt and equity funding from investors led by Sequoia Capital India. Other investors include TMV and Alteria Capital, as well as existing investors Nordic Eye Venture Capital and Motion Ventures.
Mayank Porwal, vice president at Sequoia India, says Freightify is helping with a market problem that no-one else has yet been able to solve. “The freight forwarding industry is a cornerstone of the global trade economy but despite the massive size, much of the industry remains constrained by manual processes; it runs on paper, excel sheets and phone calls,” Porwal says. “Freightify is solving this problem by helping freight forwarders to automate rate management and to make every day operational workflows fast and efficient.”
