Logistics – A Successful On-Demand Trend

You want to launch an awesome on-demand solution, but how do you attract the necessary venture capital funding to get it off the ground? In short, you need to prove that your idea will work.  In this post, we will look at one of the most successful trends in securing VC funding today; On-Demand Logistics.

This post examines three companies in the Logistics On-Demand space; Shippo, Convoy and Trove.  Aside from sharing space in the on-demand logistics economy, these three companies all built their platform utilizing an existing service-provider base and commoditized their collective services into a single online platform by tying into each service providers’ systems in order to provide transparent pricing and on-demand service.  Let’s take a more-detailed look at each below.

Shippo: Carrier Matchmaker

CEO – Laura Behrens Wu

Company name: Shippo

Funding to date: 29.3 million

Shippo connects ecommerce businesses to delivery carriers allowing these ecommerce businesses to ship the purchases to their customers across the US.  Shippo allows users to compare shipping rates, create labels, generate international customs documents, return labels, and track parcels.  By allowing e-commerce sites offer shipping from a broad range of carriers, their customers can easily weigh the timing and expense differences between them in a transparent commoditized interface.

Some of their customers and partners include eBayv Freestyle Solutions, Tuft & NeedleWeeblyGoDaddyShyp, Mercari, Stripe, Sellbrite and Snapfulfil.

Shippo has raised over $29 million in funding lead by Bessemer Venture PartnersUnion Square Ventures, and SoftTechVC.

Shippo plans to use its funding to enter the international shipping market.

Convoy: Trucking Matchmaker

Company name: Convoy

Funding to date: 250 Million

Awarded GeekWire‘s 2017 Startup of the Year, Convoy matches people who need to ship products with local and regional trucking businesses. Convoy’s interface allows their users to book trucks online with transparent and upfront pricing.

Convoy’s investors include Greylock Partners Reid, Bezos Expeditions, Barry Diller, Marc Benioff and Y Combinator.  In 2018, Convoy raised $185 million led by CapitalG at a $1 billion valuation.

Trove: Storage Matchmaker

Company name: Convoy

Funding to date: 8 Million

Founded in 2016, Trove contracts with local moving businesses which have extra storage space in their facilities.  Troves customers can use the Trove app to have movers pack, photograph, catalogue and move their property to one of these nearby moving company facilities with extra storage space.  Users can then view what they’ve stored and even request items back through the app.  Trove secured its $8 million in funding from Greylock.


Closing Remarks


Finding the right idea to secure funding hinges on many factors, but the collective stories of Shippo, Convoy and Hinge delineate a trend which has proved to be incredibly successful in the On-Demand Logistics space:

  • Populate your platform with existing, local service providers;
  • Commoditize their services into a uniform interface your users can use to choose between them based upon price and service; and
  • Interface with your service providers systems to allow users to book them easily.

Do you have any ideas to enter the on-demand space?  What factors do you think will make your idea attract VC investment?

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