Cargo One GmbH, an electronic booking platform for air cargo that gives freight forwarders real-time pricing, has raised $42 million in Series B funding led by Bessemer Venture Partners. The ability to attract new investors is a sign the company is moving beyond the development stage and has established a solid customer base and has good growth potential.
Thursday’s announcement comes at a time of extremely high demand for air transport and widespread capacity shortages that underscore the need for speed and lower costs through automation.
Cargo.one’s booking engine uses an application programming interface that allows forwarders to directly connect their transportation management systems to partner carriers’ reservation and revenue management systems. Forwarders can search, compare rates, get a real-time quote for spot market or contract rates and instantly book a shipment with a single click and get immediate confirmation. The traditional process requires visiting different air cargo websites and making tentative manual booking requests, with a time lag until the airline accepts the offer with its final price.
Airlines benefit by being able to reach more customers at less cost.
The new funding comes six months after an $18 million Series A funding round.
The Berlin-based company, founded three years ago, has signed 15 airline partners, including Lufthansa Cargo, Finnair Cargo, AirBridgeCargo, Etihad Cargo and All Nippon Airways. Many large global freight forwarders use its system. The company says it processes more than 110,000 air shipments from Europe annually.
“Between 2019 and 2020, we increased our user base by 300%, with 2,000 freight-forwarding offices now using the platform in Europe to book real-time offers. In that time, bookings have grown by more than 700 percent,” said Managing Director Moritz Claussen in a statement.
Cargo.one says it will use the funds to expand globally, with a focus on making the platform available to forwarders in North America and Asia.
“We will also onboard many more airlines to further expand our network coverage, develop our product and launch new features as well as scale our team,” spokeswoman Laura Weritz said in an email. New features will include the ability to book temperature-controlled products, such as vaccines.
Executives say the virtual-first model allows the company to attract talent around the world. It currently has staff in 13 countries, with new hires in Ukraine, Israel and Bulgaria to follow shortly.
The North American airfreight market is the world’s strongest at the moment. Year-over-year growth was more than 7% in the September-October period, while other regions were still in negative territory because of pandemic constraints on manufacturing and consumer spending.
The crash in international air travel precipitated by the coronavirus and the subsequent reduction in passenger flights has left the sector with a quarter less cargo capacity than a year ago. Globally, passenger airlines have shifted more than 2,500 aircraft to dedicated cargo service to capitalize on the strong demand and high rates.
Last month, leisure airlines Condor, TUI and Sunclass began offering their capacity in Germany for online booking, to be followed soon by other countries. All three carriers, which have many frequencies to the Canary and ABC Islands, use ECS Group to market and sell their cargo capacity, as well as supervise the cargo transport.
“The results are outstanding,” said Michael Droesch, a vice president at Bessemer Venture Partners. “Cargo.one provides a fundamentally better way for freight forwarders and airlines to book freight, leading to rapidly growing adoption and bookings across the industry. The company has had a fast and successful start in Europe, and we are excited to support their expansion into North America, which represents a large and attractive market for cargo.one’s differentiated platform.”
Bessemer Venture Partners is an early-stage venture capital firm, with a portfolio of more than 200 companies, including Pinterest.
Existing investors Index Ventures, Creandum, Point Nine and Next47 also participated in the new funding round.
As a private company, cargo.one is not disclosing its valuation.