Technology startup NEXT has secured a $97 million Series C investment round as it prepares to expand its latest product and existing operations.
The Lynwood, California-based company announced the new funding round, led by Brookfield Ventures and Sequoia Capital, this morning. Sequoia led the company’s $21 million Series B round, announced in January 2018. Total funding to date is now more than $125 million. GLP and others participated in the latest round.
A NEXT spokesperson said the new funding will be used to accelerate product innovation and bring to market its new drayage service, Relay. NEXT said Relay can increase driver revenue by at least 20 percent. The company also plans to onboard more than 150 new employees in various functions, from engineers to marketing and pricing.
“The logistics space is under more pressure than ever before – with more shipments coming into our ports than drivers and warehouses have the capacity to manage,” NEXT chief executive officer Lidia Yan said. “We look forward to bringing new innovations to market to address this issue head-on and growing our team with the best and brightest technology talent in Southern California.”
Relay is being designed to ease port congestion. It utilizes NEXT’s virtual fleet and freight marketplace with owned yards, effectively increasing the number of trips a truck can make to and from a port, the company explained. In testing at NEXT’s Gardena, California facility, Relay drivers have seen a 20 percent increase in earnings for those working in drayage, while local drivers have seen a 50 percent increase. On the supplier side, NEXT customers have seen 167 percent more containers pulled per truck.
Yan told FreightWaves that Relay operates similar to a dropyard, but the combination of NEXT’s technology and over-the-road drivers in the solution improves efficiencies and increases wages for drivers.
“According to our conversation with the terminals, only 20 percent of truck drivers make ‘dual transactions,’ meaning they haul out a full container and haul back an empty container,” Yan explained.
This is due to the time drivers spend waiting at warehouses. Many choose not to wait for empty containers and simply return to the port hoping to haul another container. Just two trips a day like this results in two additional legs with no revenue-producing load.
Relay allows drayage drivers to haul loaded containers to the NEXT facility, about 15 miles from the ports of Los Angeles and Long Beach, where they can pick up an empty container and bring it back to the ports. Yan said a typical driver could see up to eight revenue-producing loads under this system (four loaded at the port and four back to the port with empty containers). This would also increase the turn time for the terminals, she said, and improve efficiency for local or over-the-road drivers, who haul the containers from the NEXT yard to their final destination.
The inclusion of Brookfield, which invests in port operators as well as owning some ports itself, in the funding is important, Yan said. “We were looking for connections and strategic business partners that can bring business opportunities to us,” she explained. “Brookfield [can do that] because they have connections and [expertise] in port operations.”
“As the owners of 37 ports worldwide and the first fully automated terminal operator at the Port of Los Angeles, Brookfield knows first-hand the unique and complex challenges impacting the transportation and logistics sectors,” Josh Raffaelli, managing director at Brookfield Ventures, said. “We are excited to partner with NEXT and are confident that its differentiated technology, strong customer base, and proven execution will enable the company to advance its position as a true innovator in this critical area. We are eager to work with NEXT’s talented management team and identify new areas of growth.”
NEXT’s “trucker-centric online marketplace” connects drivers with shippers based on inputs the drivers themselves provide to the free marketplace app. Drivers simply input their information, such as current availability or a city where they will be in the near future with available capacity, and the algorithms match them with shippers looking to move freight based on routes, pricing, driver behavior and other intelligent matching algorithms.
A dashboard assists shippers with timelines, route information and cost summaries, locations and status of shipments. Additional benefits include the ability to maximize cash flow with paperless billing and to move goods at a more competitive price.