Digital drop-freight platform Baton confirmed that it has cut about 25% of its workforce, which included five corporate employees who supported the operational leg of the company as well as about 11 drivers.
Baton founders Nate Robert and Andrew Berberick said Tuesday the move comes as the San Francisco-based company looks to pivot its business to focus on its core product, its Radius artificial intelligence transportation management system.
“We were really proud of the drivers that were working for us, earning about $5,500 per truck per week, which is pretty unprecedented in a freight recessionary environment,” said Berberick. “What we are finding is that when showing a demo of the software, shippers and carriers would see how game changing it was and would ask to use it to power their own fleet.”
Berberick said Baton’s shift came in response to what its customers ultimately need to build a sustainable relay system.
“Making a large directional change at this stage is hard but providing them with these tools, we believe we can make a larger, faster impact in wasted driver time in the industry,” he said.
Since its founding in 2019, Baton has raised a total of $13.8 million. Its last capital raise was in March 2021 with $10.5 million in series A funding co-led by Maersk Growth and 8VC with participation from Prologis Ventures, Ryder System, Lineage Logistics and angel investors Jett McCandless, Shoaib Makani and John Larkin.
“We talked with our key investors and our board on this decision,” said Robert. “Based on the overwhelming response we have received from our customers, our investors were supportive of what was a difficult decision but was the right decision.”
The founders said the team is now focused on lining up pilots with large carriers and shippers with assets and leveraging Baton’s regional Los Angeles carrier network and its software and building a relay operation that supports specific customer needs. That work will be dependent less on Baton’s past operational team and more on a new team in engineering and product roles.
“We still believe that relays and creating these drop zones are a really important operation that the industry needs, especially for the future of [autonomous vehicles] and eliminating waste,” said Berberick. “With the software we built to perfect our own relay model, we can democratize that for all other companies looking to create the same model.”
The founders said they were grateful to the laid-off employees, who all received severance packages. Even for those who had been at Baton for less than a year, their equity was “taken care of.”
“We are reaching out to all of our investor networks and even some of our customers to see how we can help them find new roles,” said Robert. “Everyone at our company was drawn to the problem we are solving and we are just so grateful to have found those individuals.”