Sydney venture capital firm EVP has led a $7.5 million Series A investment round in freight forwarding business Explorate, recognising the company as part of a trend for old economy companies to gain strong competitive advantages by restructuring as technology businesses.
Aconex co-founder Leigh Jasper also recognised the potential of Explorate to revolutionise freight forwarding and supported the round.
The Brisbane-based company was founded by Conor Hagan and Alex Ewart both of whom have deep experience in the freight forwarding industry. They recognised the potential to use technology to improve industry operations for all participants.
The Explorate software platform includes an instant quotes and bookings service with live pricing. All shipments are tracked in real-time with email notifications flagging issues as they arise. Importantly, the platform becomes the source of truth for logistics information and compliance with documentation storage a core module.
According to EVP partner Justin Lipman, global freight forwarding has operated roughly under the same rules and processes for decades, without real impetus to change.
Global freight accounts for 12% of global GDP but is one of the world’s least efficient industries.
“It’s chaotic, highly fragmented, regional, and opaque,” Lipman said. “Shippers rely on expensive brokers and freight forwarders that coordinate shipments over phone calls and email, using spreadsheets and relying on previous relationships.
“The complexity of delivering a parcel from Australia to abroad relies on dozens of parties (factories, warehouses, trucks, plane, banks, insurers and more) and incredibly complicated standards. This makes the challenge of tracking and visibility significant. Often shippers are only made aware that their container will not arrive as intended after the fact.”
As customers adopt Explorate it becomes their single source of truth and the central communications hub for their supply chain, Lipman said. This drives long-term retention and encourages use of the technology, rather than conventional offline service providers, to build volume.
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Launched in 2018, Explorate has quickly been scaled up to serve more than 100 customers and now employs a staff or 26. According to Lipman, as a technology business, it has potential to scale up far beyond conventional businesses in the same space.
The Explorate investment marks an important milestone for EVP, the early-stage firm has now invested $100 million.
Image: Explorate founders Conor Hagan and Alex Ewart.