Forager, the Chicago-based cross-border freight brokerage and technology platform, announced today, Sept. 12, that it has closed a $3.25 million round of seed funding. The round was led by Chicago Ventures; TFI International participated as a strategic investor, and Herb Shear, Ezra Galston, and Steve Galanis also participated.
Forager was founded in January 2019 by chief executive officer Matt Silver and president Jordan Salins; chief operating officer Jessie Essman joined shortly thereafter.
The capital raise comes just weeks ahead of the launch of Forager’s technology platform, which provides real-time access to cross-border pricing and capacity and will automate many of the complex and time-consuming manual and paper processes associated with cross-border trade. Prior to founding Forager, Silver spent years at Coyote Logistics building its cross-border business in both Mexico and Canada where he developed an expertise in, among other things, complex automotive supply chains.
FreightWaves spoke to Matt Silver and Stuart Larkins, partner at Chicago Ventures, by phone.
“One of the most important things I’ve been focused on is talking to customers and carriers, putting myself in their shoes, and understanding all the problems they’ve run into with cross-border freight,” Silver said. “We aren’t necessarily focused on analytics and dashboards–we’re building exactly what we need to build to solve our customers’ specific problems.”
Forager’s hybrid brokerage-tech startup model gives it an extended revenue runway, hands-on experience to its employees, and deeply engaged customer relationships that most early-stage startups lack, it said. Silver said that Forager is not considering entering the domestic truckload brokerage market, but will focus on solving cross-border problems for shippers and transportation providers in the United States, Canada, Mexico, and then further south.
“We set out from the very beginning on a mission to offer great service to our customers and great opportunities to our carriers in an emerging market by building a great culture and a talented team of Foragers,” Essman said. “Our team has worked very hard and grown a lot in these short months. We look forward to continuing to build the Forager Family with talented, scrappy employees with an entrepreneurial spirit.”
Forager is not going to be in the business of selling software, Silver said, but instead will build a platform that connects shippers and transportation providers across borders. At the same time that supply chains are becoming longer and more complex and international trade represents a larger share of the global economy, political borders are more fraught than ever. The economic and competitive imperative of international trade coupled with the increasing complexity and difficulty of international politics creates Forager’s opportunity.
“We’re not trying to build a multi-thousand person freight brokerage in Chicago; we’re trying to build a technology company that happens to be phenomenal at moving freight in the more complicated spaces,” Silver said.
“Forager brings transparency and efficiency to what have been historically opaque operating environments,” Larkins said. “The team’s clear understanding of the idiosyncrasies within cross-border logistics, stemming from Matt’s experience, has resulted in products tailored to solve for real customer problems. This stands in contrast to many of the over-engineered solutions and sub-standard service operations we see in the market today.”
Larkins, whose fund focuses on seed investments in startups in the interior of the country — the Midwest, broadly understood, from Minneapolis to Austin — said that he found Silver’s combination of entrepreneurialism and industry DNA compelling. Chicago Venture’s team is made up of former operators, and understanding the experience of entrepreneurs is critical to finding the right people, Larkins said.
“We call it ‘founder market fit’,” Larkins explained, saying that Chicago Ventures seeks out founders who already have a deep history in the industry they’re trying to disrupt and prefers to be the first institutional investor in a startup. Chicago Ventures’ previous investments in the logistics industry include project44.
Transportation is one of the few industries, along with healthcare, that is so large and so fragmented that a startup can tackle just a piece of it and still seize a billion-dollar opportunity, Larkins said.
Forager’s business model was a bonus for Chicago Ventures, Larkins said.
“They’re not only building a technology but they’re initially the heaviest users of it, so we can instantly see from the process standpoint how they’re making the business more efficient,” Larkins said.