Our investment in Ontruck: Driving European road freight into the future!
It is no secret that the global transportation sector is being re-defined by technology and that this is leading to fundamental changes in how people live.
The ride-sharing model is the clearest example of this from a consumer perspective, allowing people to give up individual car ownership, generating personal savings and yet still feel like they are more mobile. This transformation continues with the mainstream adoption of fully electric challenger car brands like Tesla, and next generation companies like Lilium with electric vertical takeoff and landing jets for mass commuter transport!
Conversely, at the other end of the spectrum on the business-to-business side, road freight remains one of the largest offline markets somehow largely undisrupted by the global forces of technology. Road freight represents around 10% of European GDP alone and we estimate is worth €120Bn in just the top five EU countries. Yet the market is highly fragmented, on both supply and demand, with very opaque pricing and huge inefficiencies in the manual matching process used by intermediaries and the underutilisation of the carriers, who drive empty over 40% of the time. Added to this is the environmental impact, where road transport is a key contributor to rising levels of CO2 emissions. The transport sector accounts for over 20% of total CO2 emissions in the EU, with road transport generating 71% of that.
At Atomico we have been actively following this space for some time and looking for ambitious founders who are striving to change this fundamental component of our economy and society. When we came across the team at Ontruck we knew they were doing something special. In Ontruck we found a business using technology to solve both the business inefficiencies inherent to the industry as well as the environmental ramifications through their on-demand logistics platform.
— TechCrunch (@TechCrunch) May 11, 2017
OnTruck’s mission is to use technology to change the status quo by seamlessly connecting businesses directly with carriers, via an on-demand service, to provide a freight delivery network that allows any company to make immediate shipments with total control over how and when their shipments are delivered.
Focusing on regional road freight first, Ontruck gives shippers greater transparency, visibility and trust: pricing is instant across multiple truck specifications, exact pick-up slots are selected, and shipments are traceable throughout the journey. Similarly, both individual truck drivers and large fleet managers who connect via the Ontruck app, are free to accept shipments that fit their schedule, increasing the utilisation of their assets, and getting paid automatically, on-time and with reliability.
Ontruck is replacing the manual matching process, done by intermediaries today, who rely on phone and fax (!) and offer poor levels of visibility and pricing opacity. What intermediaries charge 15% commission to do in seven hours or a minimum of 10 phone calls, Ontruck can now do in 19 seconds with a couple of clicks.
— Les Echos Business (@EchosBusiness) May 11, 2017
To carriers, who are mostly owner-operated fleets of trucks, the opportunity to more easily find work and then reliably and automatically get paid for that work is a dramatic improvement to today. It also means that soon they can happily say goodbye to having their trucks run empty on most return journeys. At scale, better utilisation of trucks could have an incredible impact in terms of decreasing Co2 emissions in Europe.
The strength of the company’s technology has seen it experience 35% month-on-month growth in just over a year since launch and has already attracted a number of large, blue-chip, transportation customers including DB Schenker and Decathlon.
We are especially excited to be working with an outstanding team at Ontruck, who we think demonstrate the increasing maturity of the European tech ecosystem. Co-founder and CEO Inigo Juantegui is a repeat founder, who led his last start-up La Nevera Roja to a successful exit to Foodpanda in 2015. Similarly, co-founder and CTO Samuel Fuentes previously led large teams as VP of Engineering at Delivery Hero in Berlin and has since returned home to Spain to build another great success. In fact, the one common thread amongst the Ontruck team is that most of them have been through startup life and know what it takes to scale.
— iñigo (@juantegui) May 11, 2017
The $10m Series A investment we are announcing today will allow the company to expand its engineering and product teams in Europe, consolidate its dominant market position in Spain and then expand into new European geographies. Our newest Partner, Carolina Brochado, will join Ontruck’s board to offer hands-on advice and practical support, while Niall Wass will become a board advisor.
The team will be supported by a great group of investors from Europe’s four largest markets including Idinvest from France, Point Nine Capital and La Famiglia from Germany and of course Inigo’s former La Nevera Roja co-founder’s new fund, Samaipata Ventures in Spain.
Here at Atomico we know that scaling companies is hard. That’s why we have a systematic value creation model, developed over the last five years, that we will be deploying to help the Ontruck founders with the hardest aspects of scaling: hiring and retaining the best talent, market-entry and partnerships, user growth, marketing and communications.
We are strong believers in ambitious founders who want to change the way incumbent processes work and think global from day one. We are thrilled to welcome Ontruck to the Atomico family and we look forward to supporting them in their growth as they take on Europe with a mission to bring road freight online at last.
— VentureBeat (@VentureBeat) May 11, 2017