Newtown Partners via the Imperial Venture Fund has invested in the US-based trucking SaaS platform, BeyondTrucks. This undisclosed round of venture financing marks an increase in investment depth into the US trucking landscape.
Traditional trucking companies face the following challenges:
- Lack of digitalization in trucking payments processes
The cost of inefficiencies and lack of trust in current invoicing and payment processes represent $34.4 billion in losses annually, $30.7 billion of which is from transaction costs for payments and reconciliation processes that are largely manual and difficult to manage effectively.
- Heavily fragmented technology architecture
Current TMS solutions are not involved in the payment flow, so while shipping and dispatching may be digitized, these workflows are not linked to payment flows.
- Prohibitive operational and implementation friction
Existing financial solutions (fuel cards, payment cards, personal credit cards, and invoice factoring) are difficult to access, clunky to handle, do not have wide coverage, and are costly to use. In addition, for small and medium-sized trucking companies, there is no single “profit & loss” statement for each individual driver which makes managing fleets cumbersome.
Trucking networks are largely offline and lack digitization; therefore digital integration and financialization are critical steps to improve workflows. As a result, trucking companies’ workflows are inefficient as there is no unified system of record for transactions. Additionally, working capital is crudely financed based on fragmented data and somewhat-related performance metrics.
BeyondTrucks is looking to solve this problem in the United States. BeyondTrucks has developed dispatching software (akin to fleet management software or a Transport Management System) that automates trucking company workflows and is currently rolling out a financial services layer (such as working capital financing and card issuance) on top of that software. The core value proposition is lower-cost dispatching software for customers, the added value of debit/credit cards to manage carriers’ expenses, and factoring of their invoices. Low digitalization in trucking presents an opportunity to provide automation software that serves as a competitive wedge to financing. With its all-in-one platform, BeyondTrucks helps digitize fleet operations to build a system of record that can become the de-facto standard for the $1.7tn fleet payments market growing at 38% annually.
BeyondTrucks fits into our investment thesis that fintech is driving the next evolution of vertical SaaS. While customers in horizontal markets often try different software vendors, resulting in multiple winners in a market segment, customers in vertical markets prefer purpose-built software for their specific industry and use cases. Once one software solution demonstrates its value, the customer base will consolidate around that company for all its software needs. As a result, vertical SaaS businesses are able to become the dominant solution in a particular industry quickly.
Vertical markets are excellent candidates for a SaaS fintech business model as the fintech component broadens the go-to-market channels for vertical SaaS by growing the revenue per customer and making the product stickier.
BeyondTrucks is building a vertical SaaS platform that makes growing a trucking business easy for small to medium (SMB) trucking companies. It seamlessly combines and automates financial and operational workflows on one end-to-end platform. Leveraging automation, smart data, and embedded financial services, BeyondTrucks offers the first fully integrated trucking workflow management solution to streamline the operations of SMB trucking companies. Beyond Trucks is a good investment for us because of its growth, scalability, and ambitious vision to “build the Toast of Trucking” – or the dominant vertical payments company focused on trucking. By adding financial services alongside its core software product, BeyondTrucks is positioned to capture additional customer spend and improve its scalability and competitive position.
Led by Hans Galland (private equity, Stanford GSB) and Dr. Paul Xie (ai-chip company Lightelligence, HBS), the founding team at BeyondTrucks deeply understands the local trucking market, has technical expertise, and are second-time founders. Their story about successfully pivoting from being a successful Digital Freight Exchange (~$4m ARR) to a fintech trucking software platform with exponential user growth and tripling revenue month on month was a testament to their ability to execute. Furthermore, the team has signed several cross-regional trucking companies in its short life, and has the support of high-quality institutional investors with a strong local presence in the region and widespread distribution networks.
The venture funding round featured a cohort of multinational investors specializing in verticalized SaaS, including Pear VC, Index Ventures, Alumni Ventures, Clear Ventures, I2BF Global Ventures, and TenOneTen Ventures. The undisclosed round is part of BeyondTrucks’ journey to expand its network further, support additional product features, and create a full-stack business management alternative designed for the trucking ecosystem.