In the current scenario, the freight forwarding market in Europe is expected to be at the growth stage as the competition between many players still remains fragmented. Major global freight forwarders companies such as DHL, DB Schenker, and DSV are adapting technologies like IoT, and data analytics, to make themselves different from their competition. The digital freight forwarding market is expected to grow at a CAGR of around 25 per cent in the next five years.
Cargoplot raises pre-Seed funding
In a recent development, Amsterdam-based online platform for e-commerce importers and freight forwarders, Cargoplot, announced that it has raised €425K in its pre-Seed round of funding. The round saw participation from ASIF Ventures and several angel investors.
ASIF Ventures is an Amsterdam-based venture capital fund completely run by students. It is focused on students and recent graduates and has a ticket size of €25K to €100K.
Funds for expansion
The raised capital from the current round will enable Cargoplot to set its trading platform up for scale and continue its growth trajectory.
In an exclusive interview, Maarten de Reij, co-founder of Cargoplot, tells Silicon Canals, “Our business is inherently international, which allows for natural geographical expansion. However, for the coming period, we want to focus on e-commerce importers and freight forwarders based in the Netherlands, and a logical next step would be to focus on the German market.”
He further adds, “This investment allows us to increase efficiency and scale in providing international traders with the right freight forwarding partners. The investor base brings industry expertise as well as a rich network in the startup community, both will be invaluable to our future course.”
The idea behind Cargoplot
When asked about how Cargoplot was conceived, De Reij tells SC, “The idea sparked while trying to move motorcycles to South America. Encountering the freight forwarding industry from a client point of view is interesting. Several industry characteristics drive the potential value of the platform, most notably fragmentation, intransparency, and inefficiencies in communication. On the flip side, the level of complexity and state of digitisation creates challenges for developing such a platform.”
De Reij says he always had a curiosity about the logistics sector and saw that there were a lot of opportunities to digitise and optimise the back-end processes. And, this is why he decided to launch Cargoplot in 2020.
Finding the perfect co-founders
Maarten entered the Demonstrator Lab as a one-man show. Demonstrator Lab is an entrepreneurship laboratory where ideas can be transformed into tangible products or services. It is a learning-by-doing environment open to open to students, staff and researchers from all disciplines from HvA, UvA, VU and Amsterdam UMC.
This is where he found one of his fellow co-founders Daniel Schreij, who led the company to the third co-founder, who was a talented software engineer – Henk-Jan Meijer. Not much later, Cargoplot got accepted into ACE (Amsterdam Center for Entrepreneurship), after which it received substantial funds through a network of investors and ASIF Ventures.
Initial challenges faced by the founder
De Reij believes he had to overcome a lot of challenges. Firstly, he had to get the team right. He mentions, “Of course the most important thing for Cargoplot to be impactful would be the team, and finding the right people at that stage can be challenging. Part luck and part recognising this need led to us meeting at the right time. Making this top priority earlier would have been better.”
Once the team was set, the growth exploded, and the challenge to maintaining the level of service while growing was overwhelming. “We doubled our revenue monthly, from being busy one month to being double the next was challenging. As growth was purely word of mouth, it was hard for us to control the growth rate. I am grateful for the lessons learned at that point in time.” De Reij says, maintaining the balance between momentum and service level is the company’s main focus as they gear up for faster growth.
Prior to founding Cargoplot, De Reij had managed to gain a lot of the learnings from an earlier venture that he had set up under the name of FreFort; it was an open bidding platform for different types of Cargo, that led to a race-to-the-bottom dynamic. However, with the experience from his past venture, he says, “Very quickly we reached a ceiling on how many customers we could match while maintaining a high level of customer service. In the coming period, we aim to anticipate significant traction by setting up the platform for scale backed by high levels of customer service.”
He also talks about the time when a container of a customer of Cargoplot’s was on board the Ever Given, the container ship that was stuck at the Suez Canal. The company was responsible for handling the communication between the different stakeholders during this crisis.
The company aims to help e-commerce importers find the best transport solution and streamlining the process of transporting cargo in a cost-effective, transparent, and reliable way. Currently, the platform is live and enabling the doubling of revenue every month in the half-year leading up to the investment.
The platform claims to use Machine Learning (ML) to enable the matching between the two parties, ensuring a freight forwarding partner who is able to get your cargo to the other side of the world in a timely and transparent manner.
Kyra Dresen, director at ASIF Ventures, says, “The relentless drive and knowledge around the freighting sector allowed Cargoplot to execute adequately and create a product that solves a real problem. Bringing transparency and connectivity to a sector that is in need of this digital transformation.”
Currently, the company has a team of 5 members and are looking to hire more talents. It is currently looking for a customer success manager and other profiles, including technical people, software developers, both backend and frontend.
Business model and revenue generation streams
Cargoplot earns on a commission basis that depending on the total transaction value when the shipment is completed. The commission is calculated according to trenches linked to the weight and type of cargo. In addition, pricing is also based on the quality and expertise of the freight forwarder. “Requests for shipments are solely sent out to expert freight forwarders for that specific route and type of cargo.”
According to De Reij, future revenue generation streams could include the capitalisation on the data acquired, additional models such as affiliate sales of cargo space to freight forwarders, cargo insurance, cargo financing.