Local delivery just got a big boost with Mothership Technologies Inc. snapping up $76 million to take its same-day freight marketplace national.
The Austin-based company’s technology platform connects shippers and local delivery drivers for on-demand, same-day hauls, amid an increasingly competitive ecosystem where speed is defining many companies’ business strategies.
“Our goal is to build something virtually indistinguishable from magic. So, the old warehousing model was built off cost, but it wasn’t built off speed. And speed is the new competitive advantage,” Mothership founder and CEO Aaron Peck said.
The company’s already made a case for itself with shippers across industry verticals, from food and microfulfillment delivery to bulky home items. Customers include DoorDash, GoPuff, Harbor Freight Tools and PayPal’s Happy Returns logistics business. Within the apparel industry, the company counts Everlane and a number of Los Angeles manufacturers as customers.
Currently, Mothership operates in 37 metropolitan areas, including Los Angeles, Atlanta, Chicago, Dallas–Fort Worth, New York, Miami and Nashville.
The company of 70 employees currently has 25 open job requisitions, but Peck estimates the company can grow to 120 to 150 by the end of the year.
The CEO said the majority of the new funding—which came from Benchmark, WestCap, Bow Capital and former Con-Way Freight CEO Douglas Stotlar among other investors—will be pumped into building up the company’s workforce.
“We are a technology company. We didn’t start as a freight company and then layer on technology; we built the technology first,” Peck said. “And so, as you’d expect, because we take that very seriously a huge portion of the raise will be to continue hiring engineers, product designers, product managers to orchestrate the building of the technology. It’s all about the people. We look to hire the most talented people.”
Mothership is the next step for Peck in taking what he learned as a shipper, along with experience having built two other tech companies in the past.
Peck is the co-founder of Beatdeck, which offered data analytics to musicians. He also co-founded on-demand car rental service Skurt, which Fair.com acquired in 2018.
“Before I was in tech, I actually grew up in manufacturing and was a big shipper myself of freight and what I noticed in doing that was that I was able to very easily arrange trucks for [less-than-truckload] delivery through a corporate provider or [full truckload] through a broker, but what was really hard for me was anything local, less than 100 miles. It didn’t seem like anyone had those trucks in aggregate. I had to essentially become my own broker if I wanted to effectively do that,” Peck said.
The CEO said he couldn’t figure out why that was the case, but the problem would follow him for years until he realized the industry issue.
Short distance shipping under 100 miles involves low order values that don’t generate enough revenue for the large brokerages or legacy operators, making that business unattractive to those companies.
However, with the changing tide of consumers demanding more same day for whatever products they may be buying online, there are plenty of shippers looking for short-haul service and a fragmented ecosystem of small business box truck operators looking for work.
So, Peck set out to create a marketplace connecting shippers with short-haul carriers.
The company, which originally started off in Los Angeles, took its first load in 2017, booked and dispatched entirely through the system for apparel blanks and basics manufacturer Beimar.
“They gave us a shot,” Peck said, and then the company began booking with them daily. Beimar remains a customer of Mothership.
The company, like many supply chain tech providers, saw business balloon as a result of Covid-19 lockdowns. Peck doesn’t see the consumer behaviors that moved to the forefront around e-commerce over the past two years going away in a post-pandemic world.
“Speed of delivery, time from order to delivery, is never going to go back. People aren’t going to say, ‘Covid’s gone away. I’m going to wait three days or four days [for an order].’ So, the only effect Covid had on that was it changed the goalpost,” Peck said. “But consumers will never allow it to go back, whether there’s a pandemic or not.”
To that end, the types of products requiring short-haul delivery will no doubt also increase over time, with the CEO predicting a ramp of more bulky items delivered to people’s homes same day.
The idea of simply pressing a button to buy and having product delivered with near immediacy following that is guiding the company’s strategy and driving its growth.
“I do think that it’s changed forever,” Peck said. “Covid accelerated what was going to happen and, if anything, it showed people what is possible. I believe that my kids and the kids of the future who are going to be buying these products, they are going to increasingly test what will be delivered to their homes on size and speed, and they will push for more and more over time.”