Business

SoftBank-backed Frete.com joins unicorn club with $ 200 million funding

Parent company of CargoX, the Brazilian logtech group intermediates more than $18 billion in transactions annually

CargoX Frete.com unicorn Brazil
Federico Vega, CEO of logistics unicorn Frete.com. Photo: Frete.com/Courtesy
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The parent company of the log tech CargoX, Frete.com is the newest unicorn (startup with a valuation over US$ 1 billion) in the Latin American ecosystem. The Brazilian company has closed a $ 200 million round led by VC giants SoftBank and Tencent.

The group brings together three different solutions for the transport and logistics market: FreteBras, a freight platform, a fintech that is focused on payment and credit transactions, FretePago and CargoX, a company that offers digitalization to truck drivers and carriers.

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The holding is led by Federico Vega, founder of CargoX and CEO of Frete.com. The company raised more than $390 million in investments from organizations such as SoftBank Latin America Fund, Tencent, Valor Capital, LightRock, BTG Pactual, Goldman Sachs, Blackstone, Farallon Capital, and Inter-American Development Bank (BID Invest). BofA Securities acted as an advisor in the context of the investment round.

With the capital, Frete.com aims to invest in product development and technology to improve the match between cargo and trucks, increase safety, reduce paperwork and make the ecosystem more sustainable.

Technology against inefficiency

The company’s model is based on reducing the inefficiency of the relationship between carriers and truck drivers. For Frete.com, this is possible through digitization.

“Making unused capacity more accessible generates savings of up to 25% in transportation costs”, explains Frederico Vega. Other solutions offered by the group, such as credit for working capital, help to reduce operating costs and expand the operation of carriers. Truck drivers, in turn, increase their profit by up to 50% when using their platforms, according to the group.

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CargoX has been attracting global investors — and was considered a potential unicorn in recent years — because the logistics market faces a digital challenge in the region, and the group has shown impressive results. Annually, it intermediates more than $18 billion in transactions, reflecting $450 billion in the value of carried goods.

During the pandemic, CargoX zeroed in its marketing investments to create a BRL 30 million fund to help small carriers and fleet owners.

In the path of international investors

“We are proud to invest in Frete.com because we understand that the company brings innovative solutions to a huge market, with great demand for digitalization and better services”, says Carlos Medeiros, an investment partner at SoftBank Latin America Fund. “We have already invested in log techs in the main markets around the world and we see great potential in the sector. We are very confident in our partnership with Frete.com in Latin America”, adds Medeiros.

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Reinvent Capital is also investing in Frete.com. According to Reid Hoffman, Linkedin founder and advisor to Reinvent, “Frete.com powerful network effect and market leadership create a unique opportunity to invest in a solution that is substantially transforming the region’s logistics industry. ”.

The platform has over 615,000 registered and active truck drivers and over 80,000 unique users posting loads every month. With the new injection of capital, the unicorn that owns CargoX wants to jump from 1,300 employees to 3,500 by the end of 2022.

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