While traveling the 164,000 miles of highways in the US, you are guaranteed to see one of the 15.5M trucks in service today. You may look at a truck, speculate on its contents, and wonder if it’s available to take on your shipment. Trucks are the lifeblood of the economy, accounting for 70% of all freight transported. Yet the freight shipping industry has been stuck in the stone ages. NEXT Trucking noticed this disconnect between shippers and truckers and built a platform that simplifies the archaic freight shipping system. The company’s mobile app is a marketplace that connects carriers with shippers, serving as a booking platform that also simplifies payment, assures vetted carriers, and provides real time tracking. From the cofounder’s previous pain point as a distributor of televisions, NEXT Trucking was born and it is disrupting the logistics space.
LA TechWatch had a chance to catch up with cofounder and CEO Lidia Yan about the company’s genesis, future plans to scale, the state of logistics, and latest rounds of funding which brings the total funding raised to an impressive $27.3M.
Who were your investors and how much did you raise?
We raised a $21M Series B round led by Sequoia Capital.
Tell us about NEXT Trucking.
NEXT Trucking offers the first trucker-centric online marketplace that connects carriers with shippers. Truck carriers are now able to connect directly with shippers based on routes, pricing, driver behavior, and other intelligent matching algorithms vs the traditional method, which is based on shippers providing load information to brokers who call several truckers to find the cheapest option. In addition, NEXT Trucking provides several free tools to its primary audience, small and mid-size fleets. For example, they have free access to freight management tools that small owner-operators can’t typically afford. There are also Quick Pay options (3% fee) and a soon to launch premier program that allows free access to Quick Pay in exchange for committing to a percentage of available capacity.
The NEXT Trucking family has been in the logistics business for over 15 years, running one of the largest TV distribution centers in Southern California. After witnessing firsthand, the inefficiencies of the trucking industry, which included outdated processes and slow communication channels, I established NEXT Trucking in 2015 to streamline the shipping process.
Instead of letting the rapid decline of qualified carriers continue to potentially destabilize our supply chain, and economy in general, we chose to overhaul the way the industry works and empower the truckers. We couldn’t watch this happen from the side of the road; so NEXT Trucking developed the first online marketplace that mitigates the negatives by building a strong, transparent community.
How is it different?
NEXT Trucking is unique in the market because our marketplace is trucker-centric and aimed at helping the owner-operators and small and mid-sized fleets.
What market you are targeting and how big is it?
We are targeting the $460 Billion Truckload Market.
What’s your business model?
We charge shippers commission by connecting them with the right carrier.
We chatted in March of last year after your last raise. How is your role as CEO changing as the company continues to scale?
I will be focusing on recruitment efforts to bringing the best talent to NEXT Trucking. Also as the company continues to grow, I also plan on spending more time with our executive team on refining our company culture as it relates to our customers, carriers and team members.
What was the funding process like?
We were fortunate to have found Sequoia Capital and in particular, Omar Hamoui, our partner and our newest board member, who has become a real mentor to myself and our team during this funding process.
What are the biggest challenges that you faced while raising capital?
We didn’t have many challenges while raising our Series B. The industry is ripe for a change and we are doing the right thing at the right time.
What factors about your business led your investors to write the check?
“Logistics is at the very core of our economy, yet it faces some real challenges. NEXT Trucking has created a marketplace powered by sophisticated technology that resolves many of the critical imbalances that exist between the shipper’s needs and driver’s availability,” said Sequoia Capital Partner Omar Hamoui, in a statement. “The team has tripled revenue year over year and earned extremely high satisfaction and retention numbers on both sides of their marketplace.”
What are the milestones you plan to achieve in the next six months?
We plan to grow our infrastructure base including a greater increase in spending on product development, operations, technology and marketing. We will also expand to new markets in the US in a very strategic way. We are matching up supply and demand before moving into new lanes. We’re not rushing into anything that does not benefit both carriers and shippers right away. This strategy allowed us to grow 3x year over year and we expect it to do the same over the next 12 months.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank? Keep your head down, work hard and stay true to your vision and ultimately ask yourself the question – Is your product or company solving an issue?
What is your favorite restaurant in LA?
We are fortunate in Southern California to have a wide variety of eating options available to us. While I don’t have one favorite restaurant I do feel that as long as food is well prepared, the restaurant has an original atmosphere and that they take the food seriously, like a piece of art, then I will frequent those restaurants more often.