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BusinessFinanceNewsTrucking

sennder acquires Uber Freight Europe

Uber (NYSE: UBER) announced Wednesday morning that it had agreed to sell the European division of its Freight business to sennder, the Berlin-based digital freight brokerage. 

In June, sennder acquired Everoad, its French rival, reaching six locations and 350 employees. In July, sennder closed a tie-up deal with Poste Italiane to manage the Italian postal service’s €100 million full truckload spend.

The all-stock deal, worth less than $1.1 billion according to reports, gives Uber an equity stake in sennder. The broad outlines of the spin-off are consistent with Uber’s approach to divesting business divisions in markets where it has failed to establish a leadership position or a path to profitability. In January, Uber sold Uber Eats India to Zomato in exchange for stock. Earlier this summer it was reported that Uber Rides was considering exiting its joint venture with Yandex, a Russian ride-sharing company. 

Uber Freight will now refer customers seeking logistics services in Europe to sennder, while sennder will reciprocate for its customers who need to move freight in North America.

“Uber Freight Europe runs operations across Europe with a focus on the Netherlands, Germany and France,” said sennder CEO David Nothacker in an email. “We both share a strong focus on enterprise customers, which will now be targeted together. Together, we have the strongest customer base of all digital freight forwarders in Europe and manage over 50,000 loads per month.”

Uber Freight Europe was headquartered in Amsterdam and operated primarily in the Netherlands, Germany and France with a team of about 150 employees, though it also moved freight across the European Union. The idea was to connect entrepreneurial small carriers based in Poland to the German economy and Europe’s largest port in Rotterdam in the Netherlands. Uber Freight had expanded into Europe at the request of Heineken.

“It has been a strategic decision to join forces to serve the industry and our customers with the best product and service possible,” Nothacker said. “Both companies are tech driven and there is a high overlap in service. Through the acquisition we establish a local presence in the Netherlands with a strong team and operations.”

“We are proud of the incredible growth and success our Uber Freight team in Europe was able to achieve” said Lior Ron, head of Uber Freight. “This collaboration with sennder allows us to further extend our reach in Europe while doubling down on our Uber Freight business in North America, and to jointly push the digital freight industry forward.”

In January, Uber appointed Tom Christenson, a veteran of Amazon, as general manager of Uber Freight Europe. At the time, prior to sennder’s acquisition of Everoad and joint venture with Poste Italiane, Christenson said that no player had more than single-digit market share in Europe’s freight brokerage industry. 

“The [sennder] team has been heads-down building, iterating and scaling their core technology,” said Barry Large, partner at Dynamo Ventures, the supply chain-focused venture capital firm that invested in sennder’s 2017 seed round alongside Scania. Large sat on sennder’s board until last year.

“The TMS that sennder operates is purpose-built for their culture, customer-centric operations and the needs of both shippers and carriers. sennder identified in 2018 that over time, many routine roles can be optimized and further automated to increase revenue per head,” Large continued. “To add to that, in the EU market, double brokerage is not uncommon and is a symptom of supply intransparency. sennder has built systems to streamline carrier management so they have a consistent and quality base of drivers. On the shipper side, much like the U.S., streamlining workflow and freight transparency is key, and sennder continues to focus here to grow their technology advantage.”

An Uber Freight manager said it ran into challenges adapting its owner-operator-focused technology platform and business model to the European trucking industry, which is far less fragmented than in the United States. At the time of the deal with sennder, Uber Freight Europe was moving approximately 150 loads per day and losing ground to sennder. [After this story was published, an Uber Freight spokesperson disputed the characterization of Uber Freight’s technology and said that Uber Freight’s fleet management tool was working well across Europe at the time of the acquisition.]

Earlier this summer, reports that Uber was seeking investors for Uber Freight and possibly a spin-off surfaced in the media when an email from Uber CEO Dara Khosrowshahi referencing “really, really hard choices” regarding unprofitable business units was leaked.

“Words got misinterpreted,” Uber Freight co-founder and head of operations Bill Driegert told FreightWaves at the time. Uber Freight was “still operating at 100%, full steam ahead,” he said, and the company continued to build out products and  service all customers, with a goal of “simplifying transportation and building a platform for all types of transportation.”

Uber Freight’s growth slowed dramatically as the parent company became more focused on unit economics and EBITDA profitability. Adjusted net revenue — an opaque term roughly equivalent to what most freight brokerages consider gross revenue — reached $218 million in the third quarter of 2019 and then inched upward to $219 million in the fourth quarter. In the first quarter of 2020, Freight revenue plunged to $199 million before rebounding to $211 million in the second quarter. 

Vishnu Rajmanickam contributed reporting to this story.

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John Paul Hampstead, Director, Passport Research

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.

2 Comments

  1. Smart deal by Dara. Uber Freight has been failing in Europe and struggling even more than they have in the US.

    Step 2 is to exit the rest of the freight business. I don’t think Bill Dreigert is being completely honest or he doesn’t understand the plans.

    1. I reread the statements, and it’s pretty generic. They can be operating at 100% while still spinning off, no? As a shipper who uses Uber Freight, they are doing great for us. It’s amazing how much other brokers seem to dislike them though. That just tells me they are driving much needed change.

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