Home - Business & Technology - Softbank Invests Millions to Improve Freight Business in the US
Charles Hoff
Latest Update: December 2, 2020 1:45 pm
SoftBank Group Corp, a Japanese multinational conglomerate headquartered in Minato, Tokyo, has led a $113.5 mln in Flock Freight, a California-based software startup business that offers freight services using algorithms to match trucks with the shipment heading in the same direction. The service is intended to optimize the trucks' shipping capacity by replacing the hub-and-spoke trucking system, in which networks of trucks shuttle goods via various intermediary locations.
The Flock Freight deal values ended around $500 mln, and SoftBank Corp and the Volvo Group jointly make the venture capital. SoftBank made this investment in a string of bets on various startups. This time, SoftBank has doubled down on its chance that the technology startups will soon revamp their logistics businesses; this move will also boost companies across the globe to introduce new technologies to update their logistics process.
According to economists, the logistics sector has always been a target point for venture capitalists. This year, with the COVID strain on supply chains, investments to logistics startups have spiked drastically, with 12% up this year.
To boost up the financing process of Flock Freight, Ervin Tu, the Managing Partner of SoftBank Investment, will be joining the Board of Directors of Flock Freight. Post this introduction of new technology, the company (Flock Freight) has raised $50 million in February as revenue by charging shippers a variable cost for each shipment moved. Flock Freight will allocate a part of this new capital for R&D and hire machine-learning professionals who can help develop more freight-matching algorithms for shipping contracts.
Apart from helping Flock Freight establish an algorithm-based freight service, SoftBank Corp has also helped other logistics startups like Full Truck Alliance, with bets of $1.7 billion to finance the company for creating a mobile app that can connect businesses that are looking to ship cargo to the truck drivers. In September 2020, SoftBank also participated in a $100 million financing for the Indonesian logistics startup Waresix.
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Charles Hoff is FinanceOrange's news editor. He has worked previously as a news reporter for some foremost publications. From beginning of his career, he wants to be financial news reporter because he enjoys everything about the finance and stock market, how quickly it can change and it's volatile nature.
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