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"Virtual Trucking Carrier" Startup Snags $6.1M

A San Francisco startup has launched a "virtual" carrier and dedicated back office service for owner-operators and small trucking companies. The venture, CloudTrucks, is backed by $6.1 million from Craft Ventures,  Khosla Ventures, Kindred Ventu

Benzinga · 02/06/2020 15:05

A San Francisco startup has launched a "virtual" carrier and dedicated back office service for owner-operators and small trucking companies. The venture, CloudTrucks, is backed by $6.1 million from Craft Ventures,  Khosla Ventures, Kindred Ventures and Abstract Ventures.

CloudTrucks provides a complete "business in a box" solution at an affordable price, CEO Tobenna Arodiogbu told FreightWaves. The team focuses on three core metrics —  income, cash flow and costs — then uses engineering, data science and operations processes to boost revenue and drive down costs for drivers.

"The idea is to take over all the business processes that an owner-operator has to worry about, allow them just to focus on driving and then arm them with tools that typically reserved for the largest carriers," he said.

CloudTrucks appears on the scene as dozens of other freight-tech startups are launching digital brokerages and marketplaces aimed at making the industry more efficient

Those new entrants are saving trucking companies time and money, but they have not gone far enough in solving the specific problems facing owner-operators and small carriers, according to Arodiogbu, who prior to launching CloudTrucks co-founded Scotty Labs, an autonomous vehicle startup aimed at enabling virtual control of cars and trucks.

Small trucking operations — and the vast majority of trucking companies are small, with fewer than five trucks — face the largest pressures, including skyrocketing insurance rates, mounting paperwork, and an often bewildering array of regulations and technologies.

To help manage these and other business challenges, many owner-operators turn to larger carriers that provide little relief at a hefty cost, as high as 35% of revenue, according to Arodiogbu.

CloudTrucks, by contrast, promises not to take more than 10%, he said, taking advantage of automation to reduce costs.

The company will use the new funds to build out technology and operations. While the team is developing a large network of brokers, the primary customer, Arodiogbu emphasized, is the driver.

"We view ourselves as enabling owner-operators to do what they are doing today but a lot better," he explained. "This is something I've been passionate about for years, making sure we are working on something that truly improves the lives of truck drivers around the country."

Image Sourced from Pixabay