Venture capital:
$18 million investment allows firm to expand global operations.
A Silicon Valley venture capital firm is making an $18 million bet on u Ship Inc., an Austin company that hosts online auctions for shipping services.
A prominent Silicon Valley venture capital firm is making an $18 million bet on u Ship Inc., a fast-growing Austin company that hosts online auctions for shipping services.
The investment by Kleiner Perkins Caufield & Byers will allow u Ship to expand its global operations and accelerate product development, said Matt Chasen, u Ship cofounder and CEO.
The deal caps off a big year for u Ship, which is featured in the A&E reality TV show Shipping Wars. The show, which debuted in January, follows independent truckers who bid to transport loads found on uShip.com.
Meanwhile, the company doubled its workforce to 120 employees in 2012, and plans to double again over the next 18 to 24 months. UShip doesn’t disclose financial information, but Chasen said revenue is up 75 percent this year over last.
Founded in 2003, u Ship runs an online shipping marketplace that matches customers who need to move large, unusually big items – cars, boats, equipment, freight – with thousands of transport companies who can take the load.
Consumers and businesses post their shipment listing into u Ship’s auction-style format, similar to eBay, or name their price, similar to Priceline.
Then, transportation service providers, including truckers, movers and brokers, bid on the jobs or accept the offer price. The service is free for users, uShip takes a cut of the total shipping cost.
Since its founding, more than 355,000 transporters have registered on uShip and placed 10.6 million bids.
The amount of money spent on shipping services on the site was $100 million in 2012.
Kleiner Perkins is one of the most well-known technology venture capital firms, and was an early investor in many successes including Amazon, AOL, Google, Intuit and Sun Microsystems. The firm was one of the first investors in Tivoli Systems, one of Austin’s biggest software success stories, but has not been active here in recent years.
Chasen said Kleiner Perkins approached uShip about making an investment.
“They sought us out because they had been looking for an investment opportunity in the logistics and transportation space,” he said. “They saw us as one of the more interesting opportunities in the space, and of course we were excited about working with them.”
This is the company’s third round of funding. It previously raised $10 million from Benchmark Capital and DAG Ventures, both of Silicon Valley.
Chasen founded uShip with fellow University of Texas business students Mickey Millsap and Jay Manickam. They saw an opportunity to use the Internet to make the shipping process more efficient, particularly by allowing truckers with partially empty trucks to pick up extra loads by bidding for the business.
The funding will let the company, which has focused on the consumer market, to make a push into the $300 billion truckload freight market. Next year it will launch uShip PRO, which lets business shippers and freight brokers build their own carrier networks and manage and automate their shipping operations.
In addition, the company, which has operations in 16 countries, will continue to expand in Latin America and Europe, Chasen said.
Hiring also will be a priority in 2013, he said. The company, whose headquarters is downtown at Third and Brazos streets, is hiring software engineers and mobile developers as well support staff.
“Finding the right folks is going to be our most critical challenge, but we’ve had some success recruiting out of the Bay Area and other tech centers,” Chasen said. “While it’s much more competitive in the Bay Area, folks in entry-level and mid-level software engineering positions can really live much better in Austin.”