Nebraska supply chain tech startup BasicBlock Inc. today said it has raised $78 million in backing for its platform supporting financing options for the trucking industry, adding momentum to a sector that could help accelerate operations at ports and warehouses at a time when tight freight capacity is squeezing logistics operations around the nation.
The Lincoln, Nebraska-based firm offers freight factoring, a process which pays truck drivers quickly for their loads and later claims the amount due on the bill of lading invoice as a third-party collector. Truckers pay a fee for this service, since it allows them to get paid for each delivery with greater speed and ease of use than managing the business aspects themselves.
BasicBlock said it would use the funds to expand its services, client support, and employment opportunities throughout the U.S. The venture capital round wasled by Autotech Ventures, Clear Haven Capital Management, Emergent Ventures, and Nelnet alongside continued investment from Revolution’s Rise of the Rest Seed Fund, SaaS Ventures, and TNT Ventures.
Amid global supply chain challenges, the announcement of the fund raising comes at a time when investors’ activity in the trucking, transportation, and financial technology (fintech) sectors is at an all-time high, according to Burak Cendek, partner at Autotech Ventures. “Freight carriers continue to experience difficulty meeting working capital demands because traditional financial institutions are not meeting the needs of owner operators and small carriers,” Cendek said in a release. “BasicBlock has developed a solution to enable this critical piece of the supply chain access to financing in order to compete.”
Those supply chain challenges—including tight freight capacity and congested goods in ports and warehouses—are driving a jump in the financial backing and technology development for a range of financial services in the transportation industry.
Also today, Relay Payments, a venture-backed fintech company addressing transportation payments, launched a solution to streamline complex processes and provide time-saving automation for Less Than Truckload (LTL) carriers. The new “Relay for LTL Carriers” platform is focused on modernizing payment processes in the underserved transportation, logistics, and supply chain industries, which are still heavily reliant on cash and checks to conduct day-to-day business, Atlanta-based Relay said.
That service could potentially save precious time in a segment that is struggling with shortages of both trucks and drivers, creating delivery delays and price increases in over the road freight.
According to Relay, LTL carriers traditionally must manually reconcile payments for each load on their trucks, but the new product automates that process, allowing for the automatic allocation of fees across multiple shipments for loads. "Our LTL carriers have specific, complex workflows that can be time consuming, causing lost revenue and failed reimbursement. Working directly with our customers we were able to build technology to create operational efficiencies and increased revenue. This resulted in reduced driver time on dock and increased hours of service," Relay President Spencer Barkoff said in a release.
Another startup that gained backing for similar products in the past year was CloudTrucks, which announced a “series B” round of $115 million in November 2021. The San Francisco-based startup says its “CT Cash” product helps truckers manage payments by enabling truck owners and operators to efficiently manage their businesses through steps like optimizing their driving schedules for better pay rates, maximizing their revenue and cash flow, and reducing their operating costs.
Additional options for independent truckers seeking payment support products come from digital freight matching (DFM) firms such as Convoy and Transfix, whose primary business model is connecting trucks and loads but who also support drivers in their networks by offering financial services such as freight factoring.
Gartner, Inc.