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Freight-Matching Tech Firm Cargomatic Gets Funds for Expansion

Cargomatic, a freight-matching tech startup founded in 2013, is getting a second wind with $35 million in new backing.

August 15, 2018
Freight-Matching Tech Firm Cargomatic Gets Funds for Expansion

Cargomatic focuses its freight-matching on the local and drayage markets.

Image via Cargomatic

2 min to read


Uber Freight may be doubling down on its freight-matching business, but it faces a crowded field, and now an early entrant that has had a rocky start, Cargomatic, is getting a second wind, raising $35 million in new backing.

Founded in 2013 by a tech entrepreneur from Silicon Valley and a logistics expert from Los Angeles, Cargomatic says it seamlessly connects shippers and carriers through its web and mobile apps, helping truckers grow their businesses and shippers track their freight in real time. It focuses on the fragmented short-haul and drayage trucking markets. Currently operating in Los Angeles, San Francisco, Chicago, Seattle, Dallas, Houston and New York, Cargomatic is expanding across the U.S. with plans to expand internationally.

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The company was struggling just two years ago, when the Wall Street Journal reported that Cargomatic was running out of cash, had laid off more than a third of its staff, while its chief operating officer and an interim chief financial officer resigned in rapid succession.

This week, the Journal reported that Cargomatic has installed new leadership, upgraded its technology, and focused on landing large customers with a steady flow of freight, “We’re doing dramatically more business. We’re doing about 8 to 10 times the volume we were,” Richard Gerstein, the company’s chief executive, told the paper.

The new Cargomatic financing is led by funds affiliated with Warburg Pincus, a global private equity firm focused on growth investing, along with Canaan, Genesee & Wyoming, Xplorer Capital, and Muse Family Enterprises. 

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This follows an investment earlier this year from Genesee & Wyoming, which also announced it would add the Cargomatic to its platform as an extension of G&W’s rail service at terminal and transload locations across its U.S. rail network.

"Local trucking is a $70 billion industry in the U.S., and small-fleet trucking companies handle 80% of deliveries in metropolitan markets,” said Richard Gerstein, CEO of Cargomatic, in a press release. His company, he said, is addressing the industry’s largest pain points “through a unique combination of deep mobile and enterprise technology and the robust logistics support necessary for managing the intricacies of short-haul trucking.”

The news comes on top of Uber’s announcement that it’s doubling down on its own freight-matching efforts, Uber Freight, with plans to double its investment in the unit to drive growth ahead of a much-anticipated initial public offering.

Freight load-matching startups have drawn about $420 million in venture-capital funding since 2011, according to research firm Armstrong & Associates.

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