FreightWaves raises $37 million in new capital
FreightWaves, the Chattanooga-based freight data and analytics startup, has secured another $37 million in investment since April, vaulting it into the top 10 in venture capital raised in Tennessee.
Craig Fuller, FreightWaves founder and CEO, said the new investment put FreightWaves’ total at about $76 million, with the latest infusion helping to fuel the company’s growth initiatives.
Fuller said the focus on logistics amid the coronavirus outbreak has helped the outlook for FreightWaves, which began commercial operations in 2017.
“Logistics and supply chain are hot topics now,” he said. “Everyone now is thinking about those things. There’s so much concern about getting from point ‘A’ to point ‘B’ and they need real-time data.”
Fuller said if health care companies are removed from the list of most venture capital raised in Tennessee, FreightWaves would rank No. 2 in the state’s history. Franklin-based technology company Digital Reasoning would top that list, he said.
Some $30 million of the new capital came from Los Angelesbased Kayne Partners Fund, said Fuller, whose company employs about 130 people. The other $7 million investment came from existing investors, he said.
The company CEO said Kayne’s investment is a minority and non-control stake in the company. Fuller, FreightWaves President George Abernathy and Chief Financial Officer Spencer Piland will continue to lead the business through its next growth stage, he said.
Nishita Cummings, managing partner of Kayne Partners Fund, will join the FreightWaves board.
Cummings said that FreightWaves’ SONAR SaaS platform, which provides data, intelligence and analysis of the freight market to companies, has begun to redefine how decisions are made in the logistics space.
She said that Kayne looks forward to “supporting the team in expanding a product suite that customers throughout the freight landscape increasingly rely on to successfully manage their daily operations.”
Sybil Topel, the Chattanooga Area Chamber of Commerce’s vice president of marketing and communications, said Freight Waves continues to create hightech jobs and prove the business case for choosing Chattanooga.
“Craig Fuller likes to call Chattanooga ‘the Silicon Valley of freight’ and this tremendous capital investment in the media sector of freight and logistics is proof positive that we are the best location for future investment,” she said.
Fuller said FreightWaves has added about 10 to 15 people recently. Before the pandemic hit earlier this year, the company had trimmed its staff by just over 20 workers in the prior three months, he said.
Fuller said FreightWaves’ SONAR dashboard and its media business have each grown more than 250% in the first half of 2020 over the same period last year. The company’s media offerings include online, video and podcast news and content for the global freight and logistics markets.
“Our media business has been a real bright spot,” the CEO said, adding that it’s the size of a small cable network with 25,000 daily users.
Fuller said FreightWaves pivoted the company earlier this year from growing as fast as possible to optimizing the business for profitability. He said FreightWaves wants to “turn the business from raising capital to generating capital.”
One initiative that’s undergoing reevaluation is the launch last year of a freight futures market, Fuller said.
“We haven’t seen the uptake we’d hoped,” he said. “We’re in the process of evaluating where we go with that.”
Overall, Fuller said, FreightWaves grew its top-line revenues by 50% in the first part of 2020 over the prior year despite the coronavirus pandemic. Also, this year’s revenues didn’t include two FreightWaves LIVE events that occurred in 2019, he said.
While its LIVE event was canceled in May, FreightWaves had built a streaming TV network that carried the content and experience virtually, Fuller said.
“At our Atlanta event, we had expected to host more than 2,000 industry guests, but with the virtual offering of FreightWaves @HOME, we served more than 90,000 streaming participants over the three-day experience,” he said.
Fuller said FreightWaves didn’t pursue any federal Paycheck Protection Program money. Instead, it raised funds from existing investors such as 8VC, Prologis Ventures, Fontinalis, Hearst, Revolution, Ascend VC, Pritzker Venture Growth Capital and Fuller himself.