CloudTrucks raised $115M Series B to help truck entrepreneurs manage their business – TechCrunch
CloudTrucks wants to use technology to help trucking entrepreneurs operate their business: The California-based startup sells business management software that helps owner-operators manage cash flow and costs, generate revenue, handle insurance, and more, and it just raised a $115 million Series B.
The company will use the funds to increase headcount as it expands its business, which operates in the United States. CloudTrucks is hiring in almost all areas, with a focus on engineers and data scientists to help double down on product, as well as customer service professionals to support truckers on the road. The company also wants to broaden its digital integration with brokers and shippers.
“We cater to owner-operators and truck drivers who have one or more trucks and are managing their business while also doing the job of moving goods from point A to point B,” Tobenna Arodiogbu, co-founder and CEO of CloudTrucks, told TechCrunch. “The job of being a trucking entrepreneur is getting harder and harder. Lots of tools are being built for brokers and shippers, but not nearly enough is being done for the truck driver who’s actually doing the really hard work.”
Freight movement is expected to rise from 17.4 billion tons in 2015 to 25.5 billion tons by 2045, an increase that coincides with a decrease in truck drivers. Since the 1980s, the industry has experienced high turnover rates, in large part due to low wages and the poor health effects associated with the job. Without significant changes to the business model and talent pool, the truck driver shortage is estimated to hit 160,000 drivers by 2028, according to Deloitte.
The autonomous trucking space promises to one day alleviate these labor issues, but that shift will take place over decades and likely include integration between humans handling first- and last-mile deliveries and self-driving systems managing highway transport, according to Deloitte. Waymo Via’s transfer hub model is a perfect example of this.
Despite future projections of a driverless world, Arodiogbu sees a market need now. There are around 350,000 owner-operator truckers in the United States, according to the nonprofit Owner-Operator Independent Drivers Association, but Arodiogbu reckons the target market is actually as large as a million truck drivers. Owner-operators usually own one truck and either lease onto a carrier or operate under their own authority, but CloudTrucks also targets entrepreneurs who have up to five trucks, as well as truckers who are contractors.
Before founding CloudTrucks, Arodiogbu started Scotty Labs, a startup focused on building remote operations and autonomous driving solutions for the trucking industry, which was later acquired by DoorDash. While running the company, Arodiogbu gained insights into the problems truck drivers had with managing their businesses and why the industry has been attracting fewer drivers, resulting in today’s truck driver shortage. These issues include things like trouble making revenue-generating decisions, the rising costs of insurance and compliance, and how long it takes to get paid.
“It’s not just a job of driving, but it’s everything else that people have to manage,” said Arodiogbu. “An increasing number of truck drivers just don’t want to be company employees anymore, right? They want to take control of their time. They want to determine when they’re home and when they’re on the road. They want to determine when they get to spend time with their families.”
CloudTrucks launched three products over the past year to help solve trucking business challenges. CT Cash helps drivers get paid faster and alleviate cash flow constraints with instant pay and cash card options, as well as cash advances, so drivers don’t have to worry about not having enough funds for fuel or maintenance.
Flex, which is designed for small trucking businesses that are already managing their own insurance and compliance, helps with back office support. This product came from an existing product line called Virtual Carrier, which essentially puts drivers under CloudTrucks’ authority. Included in this is a package deal where CloudTrucks manages everything for the driver, including compliance and insurance.
Included in both Flex and the Virtual Carrier is a “schedule optimizer” feature, which Arodiogbu described as a dispatcher in your pocket. CloudTrucks has the schedule and preferences for every driver in its system, so it’s able to send suggestions for available loads that can help maximize revenue given preferences and the states they’re willing to drive to. Drivers can book those loads within the platform, which helps simplify the whole process.
Then there’s Business Intelligence, a dashboard that gives drivers a breakdown of their performance, personal expenses and revenue.
“You can’t really improve something that you don’t track, so with that in mind, we wanted to have a product that was very simple for a trucking entrepreneur to just look at the CloudTrucks app and, at a glance, see exactly how their business is performing,” said Arodiogbu.
As far as how CloudTrucks’ business is performing, the company said its revenue has increased 9.5x since it raised its $20.5 million Series A in December 2020. The startup also said it’s seen the number of loads completed on its platform grow 8x since last year, but declined to provide a base for either of those increases. Arodiogbu did say that the company completes thousands of loads around the country per month.
CloudTrucks’ Series B was led by Tiger Global with participation from Menlo Ventures, as well as investment from Flexport and angel investors Michael Ovitz and Opendoor CEO Eric Wu, and brought the startup’s total funding amount to $141.6 million.
- Enduring Planet unwraps a new fintech platform – TechCrunch
- AI startup Fractal becomes unicorn with $360 million…
- Tiger Global leads $25M investment into Swap, which aims to…
- Stacked raises $35M to bring passive investing tools to…
- How to Choose the Right Investor, According to a Coffee…
- Serial fintech founder raises $20M for Ant Money to make…