Intermodal shipping technology startup DrayNow Inc. said today it has landed $5 million in venture funding and would increase hiring as it adds additional cities to its network for connecting intermodal shipping brokers with available motor carriers.
The funding was led by Comcast Ventures and joined by Osage Venture Partners, and follows an earlier $2 million seed funding round from Genacast Ventures, the company's founders, and angel investors.
Conshohocken, Pa.-based DrayNow says its technology supports a real-time marketplace providing freight booking and tracking for the domestic, rail-based intermodal trucking industry. The company's instant load-booking app and match-making platform helps shippers and brokers connect to trucking capacity, and then track the status of shipments at any given time.
With its new capital, the firm plans to hire additional employees as it expands from its original geography of Chicago and Atlanta. The company recently announced an expansion to California and Texas, and says it will add more regions in September.
While the market has seen an explosion of smartphone apps in the freight-matching segment in recent months, DrayNow says its product is the only platform serving the domestic intermodal sector. Other firms have attempted to launch freight-matching platforms for intermodal drayage, but those earlier generations of products failed because they focused on brokers' priorities while ignoring carriers' needs, such as finding freight, being paid timely, and getting home at the end of the day, DrayNow founder and CEO Mike Albert said in an interview.
The DrayNow platform also expands the pool of drivers who have permission to haul intermodal freight by vetting carriers to ensure they have insurance, then arranging the legal authorization and posted bond required for a carrier to access the market, Albert said. That expands the number of carriers in the segment from fewer than 5,000 to a potential of 845,000 more carriers throughout the U.S., he said.
DrayNow provides its smartphone app to drivers for free, making its money by charging brokers a margin based on the type of freight and distance traveled. In return, brokers and their shipper clients gain access to a larger pool of carriers, and to the data DrayNow provides about the precise location of every load, the firm says.
"There is very low visibility and transparency in this industry from pick up through delivery and back to the starting point. We provide transparency and breadcrumbs all the way to delivery," said Albert. "When shippers give a carrier a load, they only hear about it when there's bad news, like they have to push back delivery a day. But now they can see the load when it is picked up, while it's moving, and at its delivery. This gives them the tools to finally measure their supply chain performance accurately. You can't measure what you can't see."
Providing that data has been challenging in the past because the industry's fragmentation has created friction between trading partners and required lengthy manual processes, the company says. By providing a streamlined way for brokers and carriers to connect, the platform could help solve that problem, according to Sam Landman, managing director of Comcast Ventures.
"The shipping and logistics industry is an incredibly vital and growing part of our economy. Yet the intermodal sector of the industry has seen very little technology enabling the match-making and operational efficiency it needs," Landman said in a statement. "We invested in DrayNow because the team and the technology establishes a much more efficient method for moving freight.