Several companies rolled out electric pickups in 2019. Tesla’s Cybertruck got most of the attention, but don’t sleep on General Motors and Ford — bringing electric pickups to market is critical for the viability of electric vehicles.
Automakers build vehicles around shared components. These platforms, the underpinnings of the vehicles, often live for 10 or more years, and are critical to each automaker’s economic stability. The exterior sheet metal might change, but dozens of models often share the frame, powertrain and electrical components.
Electric pickup platforms offer vehicle makers a new revenue source. Instead of building electric vehicles designed to move people, these platforms can move goods. That’s key to building a long-term strategy around electric vehicles.
Look at Ford, whose best-selling F-150 is just a portion of its success. From the F-150, the automaker has dozens of commercial vehicles built off platforms that share components. If Ford can produce an electric pickup — which it says it’s doing alongside startup Rivian — Ford will be able to electrify its commercial offering more quickly.
Specific vehicle platforms are perfect for electrification. Vehicles with a predictable driving route like municipal vehicles, delivery vans and even hearses could benefit from electric powertrains.
Electric powertrains have long offered advantages over internal combustion; electric counterparts feature fewer moving parts and are now often smaller, allowing for more interior space. And then there’s the torque that gives electric vehicles near-superhero strength.
The 400,000 distribution yards located in the U.S. are critical hubs for the supply chain. Now one startup is aiming to make the yard truck — the centerpiece of the distribution yard — more efficient, safer and cleaner, with an autonomous system.
Outrider, a Golden, Colo. startup previously known as Azevtec, came out of stealth Wednesday to announce that it has raised $53 million in seed and Series A funding rounds led by NEA and 8VC. Outrider is also backed by Koch Disruptive Technologies, Fraser McCombs Capital, warehousing giant Prologis, Schematic Ventures, Loup Ventures and Goose Society of Texas.
Outrider CEO Andrew Smith said distribution yards are ideal environments to deploy autonomous technology because they’re well-defined areas that are also complex, often chaotic and with many manual tasks.
“This is why a systems approach is necessary to automate every major task in the yard,” Smith said.
Outrider has developed a system that includes an electric yard truck equipped with a full stack self-driving system with overlapping suite of sensor technology such as radar, lidar and cameras. The system automates the manual aspect of yard operations, including moving trailers around the yard as well as to and from loading docks. The system can also hitch and unhitch trailers, connect and disconnect trailer brake lines, and monitor trailer locations.
The company has two pilot programs with Georgia-Pacific and four Fortune 200 companies in designated sections of their distribution yards. Over time, Outrider will move from operating in specific areas of these yards to taking over the entire yards for these enterprise customers, according to Smith.
“Because we’re getting people out of these yard environments, where there’s 80,000 pound vehicles, we’re delivering increased efficiency,” Smith told TechCrunch in a recent interview. That efficiency is not just in moving the trailers around the yard, Smith added. It also helps move the Class 8 semi trailers used for hauling freight long distances through the system and back on the road quickly.
“We can actually reduce the amount of time the over-the-road guys are stuck sitting at a yard trying to do a pickup or drop-off,” Smith said.
Smith sees a big opportunity to demonstrate the responsible deployment of autonomy as well as clean up yards filled with diesel-powered yard trucks.
“If there was ever a location for near-term automation and electrification of the supply chain, it’s here,” he said. “Our customers and suppliers understand there’s a big opportunity for these autonomy systems to accelerate the deployment of 50,000 plus electric trucks in the market because they are a superior platform for automation.”
Trucking is currently the most popular mode of transporting freight in the U.S., accounting for around $12.5 billion of the $17 billion freight market, according to the Bureau of Transportation Statistics. But with thousands of small and single-vehicle operators and legacy (often paper-based) systems underpinning communications, it’s also one of the most inefficient.
Now, there are signs that this is changing. A startup out of Phoenix, Arizona called Emerge, which has built a platform for shippers and brokers to find and allocate truck freight more effectively across the long tail of available truck-based carriers (a little like a Flexport but for trucks), is announcing a round of $20 million, funding it will use to continue building out its technology, as well as to keep expanding business.
The Series A — led by NewRoad Capital Partners, with previous investors Greycroft and 9Yards Capital also participating — comes on the heels of some already-strong traction for Emerge. Since being founded in 2018 by brothers Andrew and Michael Leto, the company has processed more than $1 billion in freight with 1,500% year-over-year growth between 2018 and 2019. Emerge has now raised just over $40 million and we understand that its valuation is currently at over $100 million.
Some of its traction so far is down to the founders. Both are vets of the trucking industry whose previous company, a multimodal shipment visibility/supply chain solutions platform called 10-4, sold to Trimble in a $400 million deal. And some of that is down to the gap in the market that Emerge is filling.
“Gap” is actually the operative word here. How shipments are booked on trucks today is quite inefficient, with orders often leaving empty spaces on truck beds that could be filled with goods going in the same direction; and in about 20% of all journeys carrying no load at all.
Part of the reason for this is the antiquated way that shippers book space on trucks, and part of the reason is because there is just simply too much fragmentation in the system, with 80% of all shipments today contract-based and the remaining 20% operating as a “spot market” and booked on the fly, and neither of them particularly efficient when it comes to truck occupancy. (Most of the latter spot market is booked through spreadsheets and email, Michael Leto, the CEO, said in an interview.)
Emerge’s solution is something of a stick-and-carrot approach that reminds me a little also of how advertising exchanges work.
A shipper that wants to use the Emerge platform essentially activates/lists its entire inventory of truck providers on the platform to get started. That list and inventory, in turn, become part of a bigger database of other providers: and again, this is a long-tail approach, with typically the trucking companies on the platform having no more than 200 trucks (and often less) in their fleets.
Then, when a shipper goes to Emerge to book a shipment, options are provided that might include previous truckers, but might also include others. The idea is that this provides a more efficient picture, and that in turn gets passed on as cost savings to the customers, who can typically reduce shipping costs by as much as 20% using the platform.
If the cost savings and expanded choice are the carrots, the stick comes in the form of the requirement to upload truck data and share it with other shippers: you can’t use the system without doing it.
“But it’s a network effect,” Leto explained when I asked if Emerge ever saw resistance to the model. “We allow these companies to share capacity to drive efficiencies, and to drive and lower costs with less deadhead miles. There are a lot of benefits to capacity sharing.” It doesn’t seem to have deterred too many in any case. There are currently some 30,000 carrier profiles the platform, and 12,000 transportation entities — including carriers, brokers, or other shippers — transacted in Q4 alone, speaking to activity on the platform being strong.
Emerge is not the only company that has identified the opportunity in providing a better and more updated platform to communicate and book space in the fragmented truck market. Sennder out of Berlin — which last year raised a sizeable round of funding — has also built a platform to centralise communications around booking shipments. It, however, seems to have less of an emphasis on encouraging shippers to take the lead in expanding that network effect that Leto describes.
Others that are tackling the wider shipping and logistics market and trying to improve how it runs include Sendy out of Kenya, which recently also announced a $20 million raise; Flexport, which now has a $3.2 billion valuation; Zencargo, which has also raised $20 million; and FreightHub ($30 million); Bringg ($25 million); and NEXT ($97 million).
But within that, Emerge’s performance so far, coupled with the Leto brothers’ history as founders, are giving the startup some extra mileage as we enter the next phase of what trucking might hold, which could include a critical mass of autonomous and electric vehicles on pre-defined routes.
“Uniquely, Emerge combines an exciting new technology designed to serve existing, unmet market need with experienced industry operators and entrepreneurs,” said Tracy Black of NewRoad in a statement. “Andrew and Michael are building the most innovative marketplace we’ve seen in the freight and digital marketplace industry — bringing contracts and carriers together to create new capacity. We are excited to be leading their Series A and I am thrilled to join the board to support their growth.”
The future of transportation industry is bursting at the seams with startups aiming to bring everything from flying cars and autonomous vehicles to delivery bots and even more efficient freight to roads.
One investor who is right at the center of this is Reilly Brennan, founding general partner of Trucks VC, a seed-stage venture capital fund for entrepreneurs changing the future of transportation.
In case you missed last year’s event, TC Sessions: Mobility is a one-day conference that brings together the best and brightest engineers, investors, founders and technologists to talk about transportation and what is coming on the horizon. The event will be held May 14, 2020 in the California Theater in San Jose, Calif.
Stay tuned to see who we’ll announce next.
And … $250 Early-Bird tickets are now on sale — save $100 on tickets before prices go up on April 9; book today.
Students, you can grab your tickets for just $50 here.