On Tuesday, Freight marketplace EXO Freight announced it has recently closed on an undisclosed amount of seed round funding led by 1984 Ventures with participation from I2BF Global Ventures and Lancaster Investments. EXO Freight wants to continue executing its goal to defragment the transportation market, particularly for shippers moving goods on open-deck trailers.
With experience working at brokerage capacity management platform Parade, co-founders and twin brothers Kurtis and Kris Tryber established the company when they noticed a lack of proprietary technology to help capture and optimize the open-deck market. The market consists of flatbed, step-deck, removable gooseneck and other trailer types that lack the traditional four walls of a van trailer.
“When researching the current landscape, we felt that current marketplace players, like Uber Freight, do have the ability to handle flatbed shipments but do not excel at handling the issues that arise with open-deck shipments,” said Kurtis Tryber in an interview with FreightWaves.
“Our marketplace stands out because at its core, it’s built specifically for one of the hardest types of transportation. The amount of variables that exist in the open-deck space are far greater than in the dry van, reefer and intermodal space which, in our eyes, demands its own marketplace.”
According to the company, while open-deck shipments represent 20% of all domestic truckload transportation spend, many of EXO’s competitors avoid touching this market as it often comes with higher insurance costs, more exception management and services that are often harder to automate.
“Open-deck shipments have an infinite number of variables and often need more attention than the dry van space. At the same time, the open-deck shipper is generally not as sophisticated, when it comes to technology, as large dry van shippers. This opens us up to providing shipper-facing tools to our customers, allowing us to manage the variables and create systemized processes to manage an open-deck shipment,” said Tryber.
He explained that many of his current investors called Uber and other marketplace to discuss their flatbed capabilities but were told that “they did not intend to make that a core focus.”
“We believe the current lack of supply in the open-deck market will continue for quite some time,” said David Becker at Lancaster Investments.
“Macro tailwinds from a lack of labor on the supply side and continued demand due to the pending infrastructure package will require shippers to find new and more efficient ways to move their products. The massive investment into our roads, bridges, buildings and other public infrastructure will require the movement of heavy equipment and building supplies which will need to be shipped on open-deck trailers,” said Becker.
With these new funds, EXO plans to continue building out its current marketplace technology and hiring more employees at its new offices in Royal Oak, Michigan, to service its engineering needs and growing customer base.
“It was important to invest in EXO because of the team. It’s rare to find founders who understand an industry, inside out, and understand technology and how software could open up new possibilities,” said Ramy Adeeb, founder and general partner at 1984 Ventures.
“This massive part of the transportation industry is in need of disruption with plenty of tailwinds — rising costs, scarcity of supply and a declining workforce,” he said.