True to its name, a Chattanooga business startup is quickly making waves in America's $726 billion freight industry and is gaining the attention and capital of a number of key players in the industry.
Freightwaves announced Monday it has raised another $21 million in equity capital with investments from Hearst Ventures, the venture capital arm of the newspaper and media company; Prologis Ventures, the venture capital arm of one of the top global logistics real estate companies, and Rise of the Rest, the venture arm of Internet venture capitalist and AOL founder Steve Case. Combined with earlier seed and series A funding rounds, Freightwaves has now raised $40 million in venture capital and boosted the market value of the privately held company to nearly $100 million.
"This round was entirely opportunistic and was initiated because we had a great deal of strategic interest from very important partners," said Craig Fuller, the CEO of FreightWaves who launched the Chattanooga firm in June 2016.
FreightWaves provides news and commentary, data analytics and risk management tools for the transportation and logistics industry and is preparing to help create a new futures trading market for spot truck shipments next month. From its new corporate headquarters opened last year in the 400 block of Market Street, dubbed "Freight Alley," Freightwaves prepares and posts dozens of stories every week on its website, www.freightwaves.com, and also has begun a live 2-hour radio show every Saturday on Sirius XM radio. Fuller said the company also is preparing to launch a 24-hour-a-day TV show on trucking and logistics.
Fuller said Freightwaves, which expects to triple in size this year with an annualized revenue run rate equal to a $100 million-a-year company by December, didn't necessarily need more capital and he said the company has turned down some earlier interested investors. But Fuller said he was eager to establish relationships with investors from major media, internet and real estate experts in the logistics business involved in the latest round of equity funding.
Bob Corker, Tennessee's former U.S. Senator who chaired the Senate Foreign Relations Committee until he left office last month, also participated in the round as an investor.
"Chattanooga is a transportation and logistics hub, and I am proud to see another homegrown company that is already making an impact in the world of freight," Corker said in a statement Monday.
Fuller, the son of former U.S. Xpress Enterprises CEO Max Fuller who grew up in the trucking industry, said Freightwaves currently has about 85 employees and is one of the highest paying employers in Chattanooga with plans to hire more market experts, data analysts and shipping scientists to help make sense of the growing and changing shipping market around the world. Last fall when it announced the expansion of its downtown headquarters, Freightwaves said it planned to expand its staff to 260 employees and expects to ultimately grow to be a company worth $1 billion or more.
"Freight is the lifeblood of the global economy so we need tremendous opportunities for growth," Fuller said. "We see a massive industry that is underserved in data and market intelligence and we have the opportunity to build that and create transparency for it."
Freightwaves' SONAR SaaS product, a digital dashboard that displays an array of shipping costs, trends and trading data, "continues to grow at monthly double-digit rates as clients experience the value of fast data and increasing visibility into the transportation and freight markets," Fuller said. "The Sonar device has already become the leading digital display app in the industry used by about 100 corporate clients with nearly 1,000 users around the country "and we expect to have over 300 corporate clients by the end of the first quarter," Fuller said.
Ultimately, Freightwaves also hopes to work on developing artificial intelligence to better assess the market.
Fuller said having Hearst investors in Freightwaves creates opportunities to capitalize on the media company's growing digital expertise and experience in subscription-based newspapers and trade journals as well as its expertise in corporate financial analysis through its purchase last year of Fitch ratings service.
"We see Hearst as a very strategic partner that can help us not only in our digital news media products but also in helping us build up our data products," Fuller said.
Hearst Ventures Managing Director David Famolari said Freightwaves "combines powerful industry-specific data and analytics with fresh commentary, unique insights and risk management solutions" that should appeal to shippers, freight carriers, freight forwarders and trades and investors in the evolving industry.
Prologis Ventures is the venture capital arm of Prologis, Inc., the global leader in logistics real estate with operations in 19 countries across four continents. Prologis Ventures has been making venture investments since 2016 with a focus on next-generation solutions for the future flow of goods.
"Prologis Ventures has been working closely with the Freightwaves team to map out electronic logging device (ELD) location data," said Prologis Ventures managing partner Will O'Donnell. "We expect to leverage this data to understand how logistics facilities can operate more efficiently by improving the interaction of trucking companies, shippers and warehouse operators across the many facets of the modern supply chain."
Revolution's Rise of the Rest Seed Fund (ROTR Seed Fund) also participated in the latest round of financing following the visit in May 2018 by Steve Case, the former AOL founder and chairman of the fund.
"In the Third Wave of the internet, entrepreneurs seeking to disrupt major real-world industries will focus on scaling in cities where that sector expertise resides," Case said. "Freightwaves embodies both of these concepts by combining Chattanooga's history of logistics expertise with data from collaborations with some of the most important participants in the transportation ecosystem."
The round also included every institutional investor that has previously participated, including Fontinalis Ventures, the mobility venture fund founded by Bill Ford; Pritzker Group Venture Capital; Ascend Venture Capital; Story Ventures; and Engage Ventures. Kelvin Beachum, offensive tackle for the New York Jets, also continued his investment in FreightWaves with additional participation.
Fuller said Freightwaves will use the new capital to expand data and transparency products beyond trucking to include air, rail, maritime, port, warehousing, and global expansion.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340