Startup FourKites Raises $35 Million to Expand Abroad, Improve Shipping-Time Prediction
FourKites Inc., a startup that tracks freight shipments in real time, said it has raised $35 million to expand its operations abroad and improve its ability to predict shipping times.
The Chicago-based company makes software that shows shippers and logistics companies the location of their cargo and alerts them to potential delays.
The technology helps retailers and manufacturers predict when their freight will arrive at its destination by analyzing location data from trucking companies, weather and traffic information, as well as information about wait times at warehouses. FourKites customers include retailer Best Buy Co., food company Conagra Brands Inc.CAG +0.61% and agribusiness firm Cargill Inc.
The market for such services is growing as shoppers and retailers like Walmart Inc. demand speedier, more precise delivery of everything from consumer electronics to truckloads of sugar, beer and packaged foods.
Manufacturers and other businesses are relying on “just-in-time” shipments of components and raw materials. Last week, oil-field services firm Halliburton Co. warned that its first-quarter earnings would be hurt by delays in deliveries of sand used to hydraulically fracture shale wells.
FourKites’s Series B round, led by August Capital, AUG 0.96%includes additional funding from Bain Capital Ventures and Hyde Park Venture Partners. HYD 0.13% In 2016 FourKites raised $13 million in Series A funding led by Bain and existing investors including Hyde Park, and in the prior year raised $2.5 million in two seed rounds.
Founded in 2014, FourKites has 160 employees and plans to double its head count this year. In addition to expanding further in Asia and South America, FourKites plans to add to its range of prediction services, such as forecasting when customers’ trucks will be empty.
The company declined to comment on 2017 revenue or when it expects to break even, though Chief Executive Mathew Elenjickal said revenue increased by 400% over the past 12 months.
FourKites tracks at least one million loads a month for customers in the U.S., Canada and Mexico, Mr. Elenjickal said. About 80% are full truckloads of freight. The company also monitors less-than-truckload shipments, parcel delivery and cargo moving by rail and ocean. Recent deals include agreements to track supply chain for Unilever PLC in Europe and for Anheuser-Busch InBev SA in South Africa.
Bigger companies are snapping up startups that monitor freight. In August, supply-chain software firm Descartes Systems Group bought MacroPoint LLC, which provides location-based truck tracking, for $107 million. GPS developer Trimble Inc. purchased 10-4 Systems Inc., a logistics visibility company, the following month for an undisclosed sum.
Mr. Elenjickal said remaining independent and the access that affords to data providers would help FourKites build out the broadest network possible. “Our competitors sold pretty early,” he said. “We are not looking at M&A right now.”
Food maker Kraft Heinz Co. began using FourKites’s software about five months ago to track customer deliveries as part of a broader effort to improve on-time performance. Two of the company’s biggest customers, Walmart and Kroger Co., have begun imposing penalties on suppliers that deliver outside a preset window.
“We started tracking the truck 24 hours before it’s supposed to pick up at our distribution center, so we know in advance if it’s going to be on-time or late,” said Troy Shannan, Kraft Heinz’s head of North America supply chain. The company’s on-time delivery rate is now between 75% and 80%, up from the mid-50s in fall 2016, he said.
—Heather Haddon contributed to this article.
Originally featured in The Wall Street Journal.