Emerge, a Scottsdale, Arizona-based digital freight marketplace, announced Tuesday it has closed a $20 million Series A financing led by NewRoad Capital Partners, a growth equity capital firm based in Rogers, Arkansas.
The round also includes Greycroft and 9Yards Capital, among other investors.
With the latest round of funding, the company plans to expand its development, operations and enterprise sales teams and is expected to move into its new 36,000-square-foot headquarters in Scottsdale in March 2020.
Emerge's freight logistics platform is basically a transportation management system (TMS) with an attached marketplace. Shippers can put their vendors on the platform, but that private network is also hooked up to a larger marketplace, allowing participants to share excess capacity.
"We want to provide a more delightful experience for our shippers where they can procure their truckload and less-than-truckload in the most efficient way possible," Emerge CEO Michael Leto told FreightWaves.
Most shippers are sourcing truck capacity from a very small percentage of the industry, he explained, on average only working with approximately 20 trucking companies or brokers.
While larger U.S. shippers may contract with around 200 or 300 carriers, both of these groups of shippers are only connecting with a small fraction of available vendors.
The Emerge platforms connects shippers and brokers "with hundreds of thousands of carriers to find the perfect truck," said Leto, driving efficiencies and reducing costs.
The environmental wins compound the benefits. About 20% of all truck miles are so called "empty miles," — driven while the truck has no load. Optimizing carrier and shipper matches cuts down on empty loads and associated greenhouse gas emissions.
Founded in 2018 by Leto and his brother Andrew — a sibling duo who founded the third-party logistics giant GlobalTranz — Emerge has already processed over $1 billion in freight and reported 1,400% year-over-year growth from 2018 to 2019.
Several Fortune 500 companies and hundreds of other companies have adopted the platform, and many have achieved double-digit cost reduction on their transportation spend, the company said.
Amid a slew of new digital freight platforms, Emerge stands out for the cumulative experience of its leadership team, according to Leto, who in addition to co-founding Emerge and GlobalTranz, launched along with his brother 10-4 Systems, a freight-tracking software company eventually sold to Trimble.
Other members of the Emerge executive team include Vice Chairman Jack Holmes, retired CEO of UPS Freight, and Chief Commercial Officer Grant Crawford, a former FedEx Corporation (NYSE: FDX) executive.
"We've got the dream team as far as transportation is concerned," Leto said. The founding group consists of "freight people building technology," he added, and "that kind of experience really sets us apart from our competitors."
Tracy Black, operating partner of NewRoad, echoed those sentiments.
"Uniquely, Emerge combines an exciting new technology designed to serve existing, unmet market need with experienced industry operators and entrepreneurs," Black said in a press release.
The Letos are building "the most innovative marketplace we've seen in the freight and digital marketplace industry — bringing contracts and carriers together to create new capacity," she added. "We are excited to be leading their Series A."
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