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Technological innovation has led to the rise of e-commerce, with more truck drivers crying out to deliver our smartphones and pelotons and pineapples. But the trucking industry, the backbone of our heavy spending, has yet to see the technological advances needed to create a stable and robust supply chain.
The industry is incredibly fragmented, with truckers, most of them self-employed, spending all day looking for brokers and shippers to give them their next gig. And when they do, they spend nearly half their time sitting at busy ports waiting to be loaded or unloaded — a task that’s probably as boring as it hurts a trucker’s bottom line, according to Daniel Kao, the co-founder. TruckSmarter founder and CEO says truckers are only paid per mile.
To help alleviate some of this and make trucking a more attractive career opportunity, Kao and co-founder Paolo Bernasconi came up with TruckSmarter, a free platform for finding and hiring truckers, carriers and shippers – like the Zillow of the trucking world.
The ability to use the service for free is one of the things that sets TruckSmarter apart from many other trucking software solutions for an outdated, but vital industry. CloudTrucks, SmartHop and Convoy have all launched in recent years to help connect truckers, carriers, shippers and brokers. Each offers a delivery service or scheduler, which TruckSmarter doesn’t yet have, but there’s a reason for it.
“CloudTrucks are virtual fleets, so their main job is transportation, and to be part of their ecosystem, drivers have to give 15% of their income to move the load – which is much better than the industry standard. 30%, but the end is just being a driver for them,” Cao said. “Compared to that, our belief is that truckers want to own their own business and earn as much as they can – just like the American dream of buying your own truck, running your own business and doing your own accounting with TruckSmarter.”
Although TruckSmarter’s load board is free, the company makes its revenue by offering a one-day payment to truckers. Truckers have to wait 30 to 45 days after a load is finished, which means they often have to pay for gas, repairs or maintenance, Cao said. TruckSmarter takes a 1.5% cut of freight revenue for same-day payments, but based on the current and future scale of the platform, that little bit can collectively turn into big money for the startup.
In its year of operating undercover, TruckSmarter brought in nearly 100,000 active users without spending any money on marketing, according to the company.
He pointed out that the company is doing loads of $1 million a day, adding, “We’re doing more than $1 billion in annual revenue on our platform alone.” If every driver opted for same-day payment, TruckSmarter could easily pull in about $5.5 million in revenue each year. Essentially, the company is betting on the psychological effects of delaying gratification: As the marshmallow experiment taught us, it’s human nature to take a less desirable treat if we can get it sooner.
TruckSmarter is coming out of the heist with $44 million in funding so far. The company recently closed a $25 million Series A round led by Thrive Capital with participating investors including Founders Fund, a16z, Bain Capital Ventures and Fin Capital. Some big tech names have also signed on, such as DoorDash CEO Tony Xu; Ryan Peterson, CEO of Flexport; Ramp CEO Eric Gleeman; and Jett McCandless and Jason Duboe, CEO and Chief Development Officer of Project 44, respectively.
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