SmartHop is the first investment for Ryder’s corporate investment fund, but the relationship between the logistics giant and the Miami-based startup has come full circle.
SmartHop, the Miami-based tech-for-trucking startup, has raised $12 million to grow its full-service dispatching platform that helps small trucking companies work smarter, not harder.
The Series A round was led by prominent New York venture fund Union Square Ventures. RyderVentures, which announced a $50 million corporate venture fund last year, also participated, choosing SmartHop for its first fund investment. The round also includes Equal Ventures, Greycroft and SmartHop’s original investor, Las Olas Venture Capital. This follows SmartHop’s $4.5 million seed round last year, bringing the total raised to $16.5 million since its 2018 launch.
SmartHop, led by CEO and co-founder Guillermo Garcia (pictured above), has created a tech-enabled dispatch solution that helps owner-operators of small trucking companies grow their businesses. It’s an AI-powered “business in a box” that helps owner-operators compete with the big carriers by reducing operational costs, streamlining booking and providing access to the vast broker networks previously only available to large carriers. Turns out that is a very large market: The U.S. trucking industry is a $791.7 billion industry, according to the American Trucking Association’s 2019 data, and 91% of tthe country’s rucking companies operate with fewer than six trucks.
“SmartHop is utilizing technology to create opportunity for truckers, a massive and essential workforce, by giving individuals and SMBs the tool sets that they previously couldn’t access and creating a network that allows each node to be stronger by being a part of it,” said Rebecca Kaden, Union Square Ventures managing partner, in a statement. “They have seen fast and strong resonance with their customer and have only cracked the surface of what they can offer.”
SmartHop is also a very Miami story. Before immigrating to the U.S. in 2014, Garcia ran a 500-person trucking company in his native Venezuela. He started over with just two trucks in Miami, and while he ran that small company, he began to discover first-hand the market need for a solution like SmartHop.
Fast-forward to 2018, the day before a Future of Logistics conference by LAB Ventures, and Garcia was among the entrepreneurs that met with executives of the Miami-based logistics giant Ryder System in order to test and perfect presentations before pitching their startups the next day.
“That’s where we first got introduced to Guillermo and SmartHop and when we listened to their pitch we thought this is a really great idea,” said Karen Jones, Ryder’s chief marketing officer and executive VP of new product innovation. “He’s democratizing, if you will, capacity for all types of owner-operators and carriers and creating these amazing tools so that people who have six trucks or even smaller fleets can actually have access to loads that the traditional larger carriers get. We thought his technology was pretty amazing because it had some great optimization capability, so we started a relationship back then.”
In the last couple of years, SmartHop has been piloting parts of its solution with Ryder customers. “We have evolved from that and we have a good expansion plan for this year,” Garcia said.
Turns out the relationship with Ryder goes back even further. “When I came here to the US, I didn’t have a Social Security, I didn’t have credit cards, I didn’t have any transportation history so it was very difficult for me to get my business up and running,” Garcia said. It was Ryder that took a chance on him and leased him two trucks to get started, and that gave him the experiences that inspired SmartHop. Full circle.
While the pandemic was challenging for small, independent truckers, SmartHop is coming off a strong year. In the last year, the startup grew to serve over 100 trucks, has booked over 6,000 loads and is generating an annual run rate of $30 million in customer GMV. “We are helping our customers over perform their top line and this is an industry where margins are very thin,” said Garcia, adding that trucks using SmartHop are overperforming the industry benchmark by 9%. SmartHop’s full-service offering, including back-office support, load factoring and insurance, help them do that.
SmartHop is now a team of 50, up from just 10 or 11 a year ago, Garcia said. The startup brought in a head of marketing from UberFreight and a GM from UberEats. “We have people from Redwood Logistics, from Uber, from WeWork. We have brought onboard industry expertise but also that startup DNA to be able to grow and to scale at the pace that we want,” Garcia said. SmartHop is hiring engineers and fintech technologists as well as sales and marketing.
The big goal: to reach 1,000 trucks by the end of the year, Garcia said. “Last year, we learned to understand our distribution channels and how to acquire our customers at a reasonable cost, and so we want to scale, but also to keep developing our product and put it in the hands of more and more small trucking companies.”
Garcia said the South Florida community has been supportive from the beginning, from all of Ryder’s help with piloting and now its fund investment to Las Olas Venture Capital putting in the first check.
“A couple of years ago during fundraising roadshows, people asked what we were doing in Miami,” Garcia said. “That conversation has changed for the better, for good hopefully, and we’re very excited about that.”
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