The Brazilian CargoX is the only logistics startup among those considered by CB Insights and Distrito as a company to become a unicorn in the next few years. With revenues at home of BRL 500 million in 2018, more than three times that of the previous year, the company has not revealed its forecasts for 2019, yet it disclosed that it wants to double the number of employees, today at 350, by the end of next year. For that to take place, according to the COO Daniel Carvalho, it will be necessary to double revenues.
Our average growth and revenue rate is more or less 20% per month.Daniel Carvalho, COO at CargoX.
Four projects launched this year should help CargoX reach that objective. The first of those is the CargoX Benefits Club, which has partners with Dpaschoal, Omnilink, Graal, and Rede Siga Bem—all of them belonging to the group BR—and offers a series of discounts and advantages for truck drivers that work for the startup.
The big objective of the program is to transform the base of 300 thousand truck drivers already registered in the platform of active drivers. These drivers would need to frequently transport goods for CargoX. “The base of actives doubled in a year, from 10 thousand to 20 thousand and it is growing at huge monthly rates,” emphasized Carvalho. All the benefits of the club show an estimated economy of BRL 14 thousand per year for each truck driver.
Along with the club, CargoX also launched, in partnership with the BR Group, the first Truck Driver Office. The space is located in the city of Santa Bárbara do Oeste, in São Paulo, and receives close to 250 drivers per month, but it has a capacity to receive even more.
“There the truck driver can rest, he has the right to take a shower, to clean their clothes, heat up their food, etc. It is a way for people to value that community which today is essential for the country, even if, thinking about it, it is so undervalued,” emphasizes Carvalho. The goal of the company is to open another 30 spaces like that one by the end of 2020.
The third project launched by CargoX this year was the Cargo Force, a marketplace for transport companies that use the platform. Through it, the startup’s partnerships, which are mostly small-sized companies, are being presented to shippers—a name that CargoX gives to the companies that own the shipments being transported—including the giants like Unilever and Votorantim.
Up to BRL 300 million to win over the small transport companies of agribusiness
The marketplace is accompanied by a big initiative in 2019: the launch of the BRL 100 million fund to finance working capital for transport companies in agribusiness—a sector that responds to more than 20% of Brazil’s GDP and in which CargoX wants to enter head on. Today, the company is already a reference in transportation of the segments of drinks, metallurgy, home and construction, and also retail.
Through the fund, the startup offers a type of loan that is linked to the intermediation of services through the platform. The value that the transport company pays CargoX for the deliveries completed through the interface of the platform is increased with interest rates, which vary according to the risk of the loan.
“We offer not only working capital, but also the technology and means for that transport company to expand its business (…) It is a great partnership, which strengthens our objectives as a company, that are not merely to be a transportation company, but rather a technology company in transportation that brings with it efficiency as a whole for the system,” explains Carvalho.
“Today, 40% of our operations are with self-employed truck drivers and another 60% with small-sized transportation companies, that reach a total of 110 thousand in Brazil,” adds the COO.
By the end of 2020, BRL 300 million should be available for small transportation companies by the startup through that fund for working capital.
Those resources come from the last contributions received. In August of 2018, CargoX completed its fifth round of fundraising. The injection of $ 60 million in capital was led by Blackstone and by the Hudson Structured Capital Management fund. Since its foundation, in 2016, the company with its headquarters in São Paulo received a total of $ 96 million in contributions, derived from investors such as Goldman and Sachs, Qualcomm Ventures, and the multinational Agility Logistics, headquartered in Kuwait. CargoX also counts with the expertise of two key executives in the directing body of the company: Oscar Salazar, the ex-CTO of Uber; and Eddie Leshin, cofounder of Coyote (the American startup with similar operations to those of CargoX in the USA).
Latin America only in the long run
CargoX operates in all the regions of Brazil, yet following the concentration of the country’s highway network, which is very strong in the Southeast and Northeast, and then in the South of the country. “Of those regions, the South is where we have a lot of space to expand and where we are looking for partners, among transportation companies and shippers, to grow,” explained the COO of the startup.
Latin America is part of the strategic plan of the company, but only in the long run. The primary focus of the startup remains Brazil, the third largest transportation market in the world, only behind the United States and China—countries in which, according to Carvalho, “there is already quite a bit of investment in technology, even for companies that do similar things” to those of CargoX.
Brazil is the best possible laboratory [to create and test solutions], due to both its size and complexity of its market.Daniel Carvalho, COO at CargoX.
According to him, the big objective for CargoX is to transform the Brazilian transportation market into an online market.