What started as a way to help small truckers fill their trailers has grown into a full-fledged total dispatch solution for over-the-road owner-operators. SmartHop is now gaining plenty of support in its efforts to scale its business, including from heavy hitters such as RyderVentures.
SmartHop on Wednesday announced the close of a $12 million Series A funding round, led by Union Square Ventures and supported by RyderVentures, Equal Ventures and Greycroft. The new funding round brings SmartHop’s total funding to $16.5 million following a July 2020 $4.5 million round led by Equal Ventures with Greycroft and Las Olas VC also participating.
“The past year was an especially challenging one for small and independent truckers, essential parts of the country’s economy who already were facing significant challenges in competing against large carriers and high rates. We created SmartHop to help these businesses thrive, and the need for our platform is stronger than ever today,” said Guillermo Garcia, co-founder and CEO of SmartHop, in a statement. “This fundraising round will enable us to continue growing our network and enhance our product and team to meet the urgent and evolving needs of small owner-operators so they can retain the control and freedom that brought them to the trucking market.”
Garcia told FreightWaves the inclusion of all the investors is important, but having Ryder involved is a form of validation for what SmartHop is building.
“Ryder has been in business for nearly 90 years; that’s a lot of time gathering data, knowledge and experience,” he said. “Their investment is validation of what we’re doing, but it also means we get the support to grow our company rapidly by testing in different environments at a scale not easy to get to on our own.”
“Ryder established a corporate venture capital fund late last year to identify new technologies and companies addressing pain points in the industry and to help bring their solutions to market quickly. We’ve kept a close eye on SmartHop since its founding and have been impressed by both their technology and their approach to addressing the challenges of fleets,” said Karen Jones, chief marketing officer and executive vice president of new product innovation at Ryder. “As the first investment through RyderVentures, we are firm believers in Guillermo’s vision for SmartHop and are eager to both invest and collaborate to bring Ryder’s 90 years of experience in logistics to support the SmartHop team’s success.”
Garcia added that with Ryder, there is more to the investment than just money.
“We are very thoughtful when it comes to partnering with others, and it has to make sense for both. In Ryder’s case, it’s not about the check but rather the operational partnership, our technology being deployed in Ryder’s trucks and bringing the economies of scale small fleets and owner-operators need to have a fair chance to compete,” Garcia said.
Founded in 2018, SmartHop provides a “business-in-a-box” solution for owner-operators and fleets of typically fewer than four vehicles. It’s Copilot freight dispatch and load booking solution provides dispatch assistance and route planning to help truckers find more profitable freight. The solution also provides load suggestions so truckers can spend less time looking for that next move.
The funding will be used to continue scaling its full-service dispatching platform, to expand staff and to seek strategic partnerships that enable small trucking companies to make smarter decisions that boost revenues and give them more control of their business, the company said.
The continued involvement of Equal Ventures and Greycroft, and the addition of USV to this funding round, is important for helping SmartHop grow its business model.
“USV, Equal and Greycroft are exceptional firms that know how to scale businesses and have a proven track record in helping startups succeed,” Garcia said. “We leverage their expertise and network in our strategy but also in our day-to-day — hiring top talent to join our teams, connecting with other companies and people, defining our strategy and brainstorming on challenges to overcome are just a handful of things we benefit from.”
Rebecca Kaden, managing partner at Union Square Ventures, which counts Twitter, Etsy, Twilio, MongoDB, Coinbase, Carta and Stripe among its portfolio, said the investment is in line with Union Square’s thesis.
“USV is focused on opportunities to build and leverage unique networks that in turn broaden access,” said Kaden. “SmartHop is utilizing technology to create opportunity for truckers, a massive and essential workforce, by giving individuals and SMBs the tool sets that they previously couldn’t access and creating a network that allows each node to be stronger by being a part of it. They have seen fast and strong resonance with their customer and have only cracked the surface of what they can offer. We are thrilled to work with the SmartHop team in this next stage of growth.”
SmartHop also provides back-office support and negotiates fuel discounts of up to 8% for users. Load factoring at 1% to 2% below market rates is available as well as SmartPay leasing that can help reduce monthly lease payments and lower maintenance costs. SmartHop said SmartPay can reduce total cost of ownership as much as 18%.
The company has also partnered with insurance providers to help lower insurance costs.
SmartHop has partnerships with Loadsmart, Redwood Logistics and Parade among others. The company said it has booked over 6,000 loads to date, resulting in a $30 million annual run rate in customer gross merchandise value.
Garcia said SmartHop’s solutions allow it to stand out in a crowded field of technology providers.
“Trucking is a huge market, and even though it seems crowded because there are lots of products and services being sold to truckers, our unique solution helps our customers avoid all the noise out there and decide what’s best for them,” he said. “They run their entire business on top of our technology rails, top line and bottom line. We help them make better decisions, but it is their business in the end. The opportunity is massive and as we gain the trust of thousands, we build the most robust network of drivers in the industry, giving them better capabilities than the leading carriers and an opportunity to compete at a higher level.”