By Jeff Berman, Group News Editor · October 2, 2020
San Francisco-based Uber Freight, a subsidiary of the ubiquitous, ride-sharing service Uber, whose proprietary app matches trucking companies with loads to haul, and New York-based investment firm and a leading investor in the logistics sector Greenbriar Equity Group L.P. said earlier today that a Greenbriar-led investment group will invest $500 million in a Series A preferred stock financing for Uber Freight, which will value it at $3.3 billion on a post-money basis.
Uber officials said that Uber will maintain majority ownership in Uber Freight and use this round of funding to “continue to scale its logistics platform and accelerate product innovation to equip shippers with technology to power their supply chains.”
Uber Freight entered the logistics market in May 2017, with a sharp focus on truckload brokerage. At the time, the company said that Uber Freight is an app that matches trucking companies with loads to haul, explaining that it takes the guesswork out of finding and booking freight, which is often the most stressful part of a driver’s day.
“What used to take several hours and multiple phone calls can now be achieved with the touch of a button,” it explained, adding “Uber Freight aims to empower truck drivers and small truck companies to run and grow their business.”
Prior to making its formal entrance into the market, Uber had its sights on the truckload brokerage market for some time, with a September 2016 Reuters report noting it was keen on becoming a freight hauler (through its acquisition of Otto, a self-driving truck startup for $680 million in August 2016) and a technology partner for trucking. The report added that Uber has pitching its services to shippers, truck fleets, and independent drivers, not just to outfit trucks with self-driving technology but also to be a player in the highly competitive $700 billion truckload brokerage arena, too, which is replete with major players such as C.H. Robinson Worldwide, XPO Logistics, Echo Global Logistics, and many other players.
“We firmly believe we can make a significant impact in the future of trucking with a new way of booking freight and a new way of connecting small fleets and owner-operators with the large tail of capacity out there in the market to the community of shippers that don’t traditionally have the resources to go out and find capacity,” an Uber Freight executive told LM at the time. “Small fleets, with ten trucks or less, make up 90 percent of the registered motor carriers in the country, but, of course, a large Fortune 500 or mid-market company would not be contracting with these small fleets.
And Uber officials said today that since its 2017 launch, Uber Freight has built one of the world’s largest digitally enabled carrier networks and transformed logistics management for thousands of shippers in myriad ways, including:
Uber Freight’s driver-first carrier tools enabling trucking companies and their drivers to book loads as seamlessly as they would book an Uber ride;
its suite of on-demand logistics solutions, APIs, and software integrations providing shippers with the ability to seamlessly plan, budget, tender, and track their freight, no matter their procurement needs; and
during the early days of the COVID-19 pandemic, Uber Freight was able to leverage its technology to effectively and efficiently rebalance supply and demand and keep businesses moving and shelves stocked with essential goods
“We are tremendously proud of what we have accomplished in a few short years. We have led the industry with technology, transforming dated and analog processes to ensure that both shippers and carriers are equipped to succeed in a rapidly changing industry,” said Lior Ron, Head of Uber Freight. “We are thrilled to be moving into the next chapter with Greenbriar by our side as a partner with deep expertise and a shared passion for simplifying logistics. We will continue to leverage Uber’s leading marketplace technology, global reach, and cross-platform capabilities to accelerate our growth and continue to lead the industry forward.”
Benjamin Gordon, CEO of Palm Beach, Fla.-based Cambridge Capital, an investor in niche supply chain leaders, told LM that the Uber Freight-Greenbriar deal reflects the maturation of logistics technology.
“Greenbriar has a 21-year history of investing in large, profitable companies in transportation, typically via buyouts,” he said. “A year ago, it would have been unthinkable for a multi-billion-dollar private equity firm to commit $500 million to an unprofitable technology startup. Today, the lines between venture capital and private equity have blurred. Large buyout firms like Greenbriar are seeking the high growth that can only come from technology-based companies. Uber Freight can deploy this capital to accelerate their growth and continue in its quest to transform truck brokerage.”
October 2, 2020