A $10.5 million booster shot from investors will help project44 develop technology to more quickly connect supply chain partners and to provide clearer visibility into the location and condition of freight as it flows along supply lines and between transportation modes.
The logistics technology company plans to use the funds to broaden its focus from less-than-truckload shippers and carriers to embrace other transportation modes, from truckload and intermodal to global shipping and forwarding, President Tommy Barnes told JOC.com.
“Our roadmap includes expansion into truckload, intermodal, and air and ocean,” Barnes said. “I would also include our expansion globally to Europe and Asia. That’s not happening tomorrow but it’s part of the vision. There's plenty of waste [to be eliminated] in the domestic market, but the global space is where we really see an opportunity.”
Venture capital firms and other private equity investors see opportunity in technologies that promise to advance, digitize, or disrupt transportation and supply chain management. They’re hoping to latch onto the company or the technology that will be the next “Uber” for transportation. It’s no longer enough to be the next potential “disruptor,” however. The validation of potential business models is becoming more a priority for investors as the number of tech startups looking to make freight transportation more efficient multiplies.
Founded in 2014, project44 set out to validate its plan to use application program interfaces to replace electronic data interchange and better connect transportation management systems in the less-than-truckload market. The vision of Barnes and CEO Jett McCandless is to create a “neural network” of APIs exchanging messages in real-time, or close to it. The company is a “middleware” software-as-a-service (or SaaS) provider, connecting transportation systems, rather than offering a transportation system.
The company's API network now includes more than 1,000 individual APIs crossing multiple modes of transportation, including those mentioned by Barnes and last-mile delivery. Subscription-based customers of project44 exchange more than 2.1 million API transactions per day, the company said. Its clients include companies such as Estes, BlueGrace Logistics, and Cargo Chief.
“We’re confident that upon execution we’re going to effect change in a massive space, the connectivity of the global supply chain,” Barnes said. The need for greater “connectivity” is pressing, he said, pointing to the chaos caused by the bankruptcy of Hanjin Shipping. “If shippers know where that inventory actually is, they can come up with better plans" for retrieving stranded freight in Hanjin containers, he said. "Panic creates charter flights that may be necessary or may not be.”
The investment round — project44’s first — was led by Emergence Capital, an enterprise-focused venture firm with a company portfolio that includes Salesforce, Veeva Systems, and Box; Chicago Ventures, which supports midwestern SaaS developers; and Silicon Valley Bank, which provides financial services to entrepreneurial firms, especially tech startups.
The $10.5 million investment is significant to project44, but it pales compared with the overall amount of cash being invested in logistics technology. BlueGrace Logistics, for example, received a $255 million infusion from private equity firm Warburg Pincus in August. That's only the barest tip of an investment iceberg that shows no signs of melting.