U.S. transportation management business, Transfix, has raised $42 million from investors led by New Enterprise Associates (NEA), marking one of the largest funding rounds to date for a freight booking startup. In total, the company which connects retailers, consumer products companies and other shippers with truck fleets via an app and through its website, has raised $78.5 million since its founding in 2013.
The new Series C round has increased the New York-based company’s valuation by between 300% to 500% over last year, says Transfix’s founder and Chief Executive Officer Drew McElroy. Last year, reports pegged the four-year-old firm’s valuation at over $75 million. McElroy suggests the firm will turn a profit within the 12 to 18 month-period.
Transfix will compete with a wave of online bookers such as Convoy and Cargo Chief hoping to grab a share of the U.S. freight transportation management business, estimated to have raked in $58.7 billion in revenue in 2015, according to consulting firm Armstrong & Associates. Major tech players such as Uber Technologies Inc. and Amazon.com Inc. have ventured into the space alongside some traditional freight bookers such as C.H. Robinson Worldwide Inc., which has invested in online platforms attempting to disrupt the industry still reliant on armies of brokers via phone and email.
McElroy says the startup will use the new backing to expand upon its freight-matching service and bolster its sales team. The company will also tailor its technology to the specific needs of its larger customers, and hire teams to manage these clients who make up a bulk of the company’s revenue.