A technology company that aims to help shippers and carriers with demand planning and pricing to get empty trucks off the road raised $37 million to further its plans of being the air traffic control of ground transportation.
New York-based Leaf Logistics Inc. expects to about double the size of its current 35-person team by the end of this year and buckle down on product development with the new funding.
The company’s Series B was led by Sozo Ventures and also included Madrona Venture Group, Playground Global, Floodgate, Schematic Ventures and Supply Chain Ventures, along with founders from The Intercontinental Exchange and Flexport Inc.
Leaf uses machine learning to connect shippers with carriers and others in the logistics space to help make the process of moving goods more efficient. A big chunk of that is making sure trucks on the road are loaded at full capacity, filling the empty space many trucks are traveling with. Better planning around full truckloads offers reduced carbon emissions and cost savings for the shipper while ensuring greater earnings predictability for truck drivers.
“So far, the work that we’ve done has underscored the need for reliability for both buyers and sellers of transportation,” Leaf CEO Anshu Prasad said.
The idea from the start, going back to when Leaf was originally called Logistics Exchange, was to offer a place where buyer and seller data was used to tamp down on the volatility within the logistics industry.
Leaf’s working with a broad range of customers on the shipping side, including retail, consumer packaged goods, food and recently signed on a company in the automotive space. Plans are to continue expanding, with an emphasis on those industries where transportation spend is a significant part of the overall cost of goods.
The company said its network includes 425 shippers and over 550 carriers. The company said its long-term aim is to handle the scheduling of more than 90 percent of U.S. transportation.
Leaf’s business, which was founded in 2017, has so far generated 10x revenue growth and is expected to close this year with net revenue in excess of $20 million.
Flush with new capital, Leaf plans to focus on the freight payment process in the first half of the year. Currently, a number of third-party freight payment companies exist as middlemen, handling much of the clerical work and oftentimes paying carriers with paper checks. The idea is Leaf’s technology would make it “more fair and transparent between buyer and seller and charging much less than today’s intermediaries for managing the actual payments,” Prasad said.
The pandemic helped speed up the company’s growth for businesses that want to digitize how they manage their transportation. Over the past two years, challenges in handling capacity, along with planning and procurement became acute pain points that made technologies, such as Leaf’s, attractive due to the supply chain challenges during Covid-19.
When Leaf’s team looked at customers that were using its technology pre-pandemic and saw how they worked through the worst of Covid with consistent service and no deviation in pricing, it was what Prasad called a gratifying moment.
“We wanted to create the data that people can confidently make a plan for or buy equipment [such as trucks] based on a forward-looking view of demand and pricing,” Prasad said. “So that’s really what we set out to do.”
Leaf’s funding is part of a big week for super-sized logistics deals. A.P. Moller-Maersk plunked down $1.68 billion for middle- and last-mile provider Pilot Freight Services. Flexport closed on a $935 million Series E that included Shopify Inc. and the investment firm for Michael Dell.
Flexport’s inclusion in Leaf’s Series B was the first time the digital freight forwarder invested in the company.
Prasad highlighted the “tight-knit community building and forming” what transportation could look like in the future.
There’s a possibility of the two companies working together, with opportunities to talk to joint customers or other “interesting partnerships,” the CEO said.
“We’re seeing a lot of opportunities to continue to lean into how transportation should be managed,” Prasad said. “There’s a few of us [in the industry] who kind of see this opportunity to rethink the way that transportation flows.”