After failing to grow fast enough to attract outside investors, online freight exchange FreightorGator has been merged into its parent company, MyFreightWorld Technologies Inc., and its CEO and president are leaving the logistics technology startup, executives from both companies said.
FreightorGator CEO Augie Grasis and President Ryan Sutton are leaving the Riverside, Mo.-based firm "to pursue other opportunities" and have turned the management duties over to MyFreightWorld, Sutton said in an email.
Overland Park, Kan.-based MyFreightWorld holds a two-thirds ownership stake in the business and had also been funding FreightorGator as its own "angel investor" while it attempted to claim enough market share to attract outside venture capital, MyFreightWorld President and CEO Kevin Childress said. When FreightorGator failed to hit its target numbers for growth, MyFreightWorld decided to "reabsorb" the business, he said.
"The reason they're now back where they started at MyFreightWorld is that the customer acquisition costs we were seeing were way too high," Childress said. "So we will keep it alive, we will continue to fund it, and we will continue to tweak it. We will wait for the market to catch up with that, and in the meantime we will use it as one of the many tools that MyFreightWorld offers."
FreightorGator's original suite of products targeted small and medium businesses (SMBs), allowing them to view shipping quotes, browse reviews, and book shipments for less-than-truckload (LTL) freight. FreightorGator's service allows users to avoid the added cost of using middlemen like freight brokers and 3PLs and book their business directly with carriers, according to the company's website.
Once the two companies are under common management, MyFreightWorld plans to offer its third-party logistics (3PL) services to the FreightorGator user base, offering them a more complex mix of services than the site currently supports, Sutton said. By absorbing FreightorGator, MyFreightWorld will gain a new market for its products, such as a proprietary transportation management system (TMS) and the LTL and truckload (TL) brokerage services it offers to manufacturing companies, 3PL managers, and transportation intermediaries.
Despite the ownership and management shakeup, FreightorGator customers will not see any significant change, since the platform already uses the same back-end software as its parent company, and the FreightorGator sales and customer service teams will remain unchanged, said Childress. In addition, the two sites could soon begin to look more similar since MyFreightWorld plans to apply aspects of FreightorGator's online interface to the larger platform to make it more user friendly.
Founded in 2015 under the name ShipX, FreightorGator announced its new name in 2016 and launched an extensive digital marketing program to convince shippers and carriers to try its creative approach to LTL freight, Childress said. The effort generated web traffic and repeat business from loyal customers, but failed to enlist enough new users, he said.