The Brazilian logistics startup CargoX announced this week a new contribution of US $ 80 million. Led by LGT Lightstone Latin America, the investment arm of the LGT group focused on mature and highly scalable startups, CargoX’s fifth investment round comes at one of the most decisive moments for the logistics matrix in the country, highly dependent on the highways, amid the coronavirus pandemic.
A couple of weeks ago, the startup announced that it has zeroed its marketing investments planned for 2020 to create a BRL 30 million ($5.7 million) fund to help small carriers and fleet owners in the country amid the coronavirus pandemic. With the money, the startup will pay 70% of the freight for essential products such as food and medicines at the time of loading, as a way to help these small companies in maintaining the transportation of these items. The other 30% of the freight will be paid at the final destination.
In addition to health professionals, truck drivers and small carriers are also at the forefront of the fight against coronavirus. They are the ones who transport food, hygiene products, equipment and hospital supplies, everything that is necessary for the part of the population who can stay at home.
For CargoX’s CEO, Federico Vega, the existing health crisis has abruptly accelerated the need to digitize carriers, to reduce human contact and bring greater efficiency through the automation of processes and the elimination of empty return trips and times waiting. In a press release, Vega said that LGT Lightstone “is strongly aligned” with CargoX’s goals and values, “a fundamental requirement for building a successful long-term partnership.”
This Series E round was also attended by previous investors from startups, such as Goldman Sachs Growth Equity, Valor Capital, Farallon Capital, among others. Prior to that, CargoX had already raised $96 million.
Currently, CargoX has 20,000 active carriers on its platform – Brazil as a whole has around 110,000. These haulers hire drivers for their own fleet or hire truck drivers who already own a truck. In total, the 20,000 carriers today have around 400,000 trucks in the country.