Ed Stockman equates his tech companyNewtrulas a sort of Expedia or Stubhub for the trucking industry—a one-stop online shop matching shippers and truckers instead of each end exchanging multiple calls or emails.
“We are a technology platform that allows anybody looking for a truck with anybody that has a truck to easily and quickly find each other and transact,” Newtrul co-founder and CEO Stockman told Forbes.com.
In this environment of vastly increased deliveries and shipments, sparked in large part, by the Covid-19 pandemic, Newtrul's system has caught the attention of investors with the Chicago-based company announcing Sunday, a new $5.3 million capital infusion.
Lead investors includeSignalFireandFlex Capitalas well as previously unannounced investors that include Bessemer Venture Partners, Crowley, Oren Zaslansky, CEO of Flock Freight, John Larkin, and Brad Hollister.
Stockman is pleased with the mix of investors, especially SignalFire and Flex Capital which he described as “large new institutional investors that will have tremendous amount of experience with marketplaces and building unicorns and all of the ideal characteristics one would wish for when taking in new money. They both share the same vision as us in terms of developing software, and potentially even giving away software, to both parties.”
“Brokers pay astronomical premiums to arrange truckload capacity manually over the phone, often wasting over half their margin,” said Chris Farmer, SignalFire founder & CEO in a statement. “Newtrul modernizes this outdated practice with its integrated aggregation platform that lets them save both money and time on matching freight with quality carriers.”
Indeed, Stockman says the challenge for shippers trying to find the right trucks to move their goods has become more acute as demand for shipping has spiked but efficience hasn't followed.
“We've gone, in the last three years, from 19,000 freight brokerages to 22,000 freight brokerages so the industry is not consolidating it's just getting further fragmented which means truckers just need to call more places now or log into more websites,” said Stockman.
While so much has been made of a long-standing truck driver shortage, Stockman disputes that assesment asserting, “There's not a driver shortage, they're just driving all over the place empty. That's because they have to make 100 different calls a day to find the best shipment for their trucks.”
One of the other issues Newtrul's platform addresses is what Stockman terms “transparency” via its ratings system. Users can rate their experiences with shippers, carriers and receivers for all to see.
Stockman says Newtrul's “sweet spot” is what he terms mid-market trucking companies that operate 50-500 trucks rather than owner-operators or individual drivers. Over the past year, Newtrul has added more than 10,000 active carrier users of all sizes to its platform and is currently working with nearly 75 customers, according to a company release.
It costs shippers and trucking companies zero to register for access to Newtrul's platform. The registration process takes under 20 seconds. Stockman says using Newtrul's system can save trucker's 70% of the cost of finding a shipment and customers are available immediately upon registration
Freight brokers pay a transactional fee to place shipments saving them 90% of the cost to find trucks, Stockman said.
This latest round of funding follows a Seed Series raise of $2.25 million in January 2021 led by Autotech Ventures with participation from I2BF, Fission Ventures, and Plug and Play Ventures.
Stockman says the company will put its new cash infusion to use to build Newtrul's platform to force the kinds of change he believes will benefit the shipping industry by breaking some bad old practices.
“What we typically see from a lot of our brokerage clients is they may have 15,000 trucking companies set up and have used 300 in the past year, so just within their own network it's like finding a needle in a haystack finding the right truck,” said Stockman. “They need better technology to manage their relationships and we plan to not only build this but give it away for free as it all supports the greater grandiose vision of digitizing a transaction.”