Emerge, an Arizona-based freight logistics startup, has announced a seed round funding of $20 million, led by Greycroft Partners, a VC firm based in LA and New York. “Emerge is a platform that has a private freight marketplace (PFM) included in it, helping shippers connect with carriers and their brokers,” said Michael Leto, CEO of Emerge. Aside from its proprietary PFM, the company also provides a TMS which would help its customers increase productivity and have greater visibility into their supply chains.
“We feel that the experience of connecting to all the available capacity in the United States is a very difficult thing for companies to do these days. Emerge streamlines that process, allowing customers to manage their current carrier and broker base better, while also bringing additional untapped capacity to those customers,” said Leto.
Leto explained that this would help their clients to cover loads easily, increase their customer service and thereby their bottom line, while reducing operational costs. On the other end of the spectrum, Emerge provides a wide range of services to fleets in its system – real-time tracking, combined quoting and tendering, carrier management, and data-driven analytics – services that would help increase operational efficiency.
“We provide an all-inclusive and far-reaching network for customers. On our platform, we encourage shippers to deal with brokers, and we encourage shippers to deal with carriers. There is not really an approach out there that has an all-inclusive nature like ours,” said Leto. “Our platform is a system that we feel is something that can be beneficial for every single person within the touch of a transaction.”
Emerge has managed to build an enviable executive team – Jack Holmes, retired CEO of UPS Freight, serves as the company’s Vice Chairman, and Grant Crawford, former FedEx executive, comes in as the Chief Commercial Officer. The founders, Andrew Leto and his brother Michael Leto are illustrious members of the freight industry as well, being the creators of GlobalTranz – a full-service 3PL concentrating on freight brokerage and technology. GlobalTranz was acquired this year for more than $400 million by The Jordan Company, a private equity firm.
The experience of building GlobalTranz has helped Leto in growing Emerge. “Building one of the largest 3PLs in the country, offering less-than-truckload and full-truckload brokerage services has given us the insight to eliminate the real inefficiencies our customers’ experience — ultimately the platform reduces costs and positively impacts the bottom line,” he said.
Leto explained that the seed funding raised would be channeled predominantly towards recruiting more people on board and on sales and marketing efforts. “25% of what was raised would go towards development, and the rest is about personnel and sales. We’ve taken a pretty aggressive approach to our sales process. We’ve got inside sales and an enterprise sales team that targets larger accounts,” he said.
Though the company is relatively nascent – having been founded earlier this year – it is already attracting customers in droves. “On a monthly basis, we have up to 500 active users working within the system on the customer side that transacts through our platform,” said Leto. “Out of those 500, we have about 25 power users, and these people are feeding us suggestions on a daily basis, and it really helps us in driving our product to the next level.”
Greycroft Partners, the lead investors in the seed round, have noted that the investment would provide Emerge an opportunity to scale-up quickly and that technological advancements like these would catalyze the way the industry looks at moving freight.