With an eye to volatile stock market movements in recent weeks, the digital freight matching (DFM) startup Transfix has canceled plans to go public this quarter and will instead take on a new round of venture capital funding as it remains in private hands, the company said Tuesday.
In another change, Transfix said it would “streamline aspects of our operations,” which is typically a euphemism for laying off staffers. Transfix did not reply to requests for clarification on that phrase, but called it a “difficult” adjustment that was “required to meet and exceed the current and future needs of the freight industry.”
The New York-based firm had announced just over a year ago that it planned to become a publicly traded company by the end of 2022 through a merger with a special purpose acquisition company (SPAC) called G Squared Ascend I Inc. Through acquisition by a SPAC—also known as a “blank check company”—startups can jump into public markets and raise money more quickly than following the traditional route of holding an initial public offering (IPO) to sell their stock.
In a statement, Transfix said, “As we look to the future, we have determined that the best path forward to continue on our mission – given the current public market conditions – is for Transfix to remain a private company at this time. To that end, Transfix and G Squared Ascend I have mutually agreed to terminate our Special Purpose Acquisition Company (SPAC) Business Combination Agreement.”
Instead of its public launch, Transfix, which had previously raised several rounds of venture capital, will now raise a new round of backing supplied by G Squared and by NEA. The firm says it plans to spend the fresh money on “investing in our technology and innovation, advancing Transfix's modern solutions for shippers and carriers, and delivering on the access, ease, and reliability the industry deserves,” Transfix President and CEO Lily Shen said in a release.
As part of the new financing, G Squared's founder & managing partner, Larry Aschebrook, will join Transfix's board of directors. "Transfix's team of freight industry and technology experts continues to raise the bar across the sector as they work to move goods more seamlessly and sustainably. G Squared is confident in Transfix and its prospects and will continue to support Transfix as a private company," Aschebrook said.