Jahani & Associates Capital Market Report: Freight-Forward Technology
As a top investment bank headquartered in New York City, Jahani and Associates (J&A) have rich experience providing bank mergers and acquisitions (M&A) advisory, private placement and commercialization, fund advisory, and global trade services to clients all over the world.
Our report provides an overview of the freight-forward technology sector, analyzes recent capital market activity in the space, and spotlights the recent rise conducted by Flexport. From the data collected in our capital market report, our expert tech investors forecast the continued expansion in freight technology and an increase in deals and capital deployed within the sector.
J&A Capital Markets Report: Freight Technology
Freight technology, or freight-forwarding technology, has seen an approximate 2,000% increase in capital deployment since 2010. Freight technology companies, such as Flexport, Forto, and YunQuNa, have achieved billion-dollar valuations and unicorn status based on their growth across the USA, Europe, and China. This report provides an overview of the freight technology sector, analyzes recent capital market activity in the space, and spotlights the recent rise conducted by Flexport.
Freight forwarding involves brokering a variety of logistics services to assist clients with international and domestic shipments. Freight technology companies have digitalized this brokering process. These companies allow customers to arrange international trade through ship or sea using an online portal, perform live tracking, and exercise logistics data management.
Announced Freight Technology
- Global capital deployed in the freight technology sector increased by 1,987% between 2010 and 2021.
- In the sector, $62.14 billion was deployed across 835 deals, with an average deal size of $74.42 million. Considerably large acquisitions have resulted in a significant increase in capital deployed over the first half of 2021. Deal count has increased by over 1,000% since 2010, a trend that J&A anticipates will continue.
- The most significant deal within the sector was the acquisition of the German technology company Bombardier Transportation by the French logistics firm Alstom. The acquisition was announced on January 29, 2021, for a reported $9.24 billion.
Announced Supply Chain Management Technology Deals
- Venture and pre-venture capital deals represented 24% of capital deployed in the sector. The involvement of early-stage investors shows the potential for new entrants to the market and the freight technology sector’s growth potential.
- Mergers and acquisitions represented the largest capital deployment, 36%, since 2010 in the sector. Most acquisitions have been conducted by large logistics corporations looking to add the competitive advantages that cutting-edge freight technology provides.
- Freight technology companies from the USA received over 65% of the deployed capital in the past decade. Venture capital and private equity groups in North America have been particularly active in the sector since 2010.
Deal Spotlight: Flexport
Flexport is a freight forwarding technology company that has implemented a platform designed to provide greater insights and influence over every stage of logistics in the supply chain. Flexport offers product delivery and tracking through its platform along with real-time data analytics. The company facilities logistics through cargo ship, plane, or truck and allows logistics companies to use and monitor their assets effectively.
- Flexport completed a late-stage VC round of $10 million on July 15, 2021, at a pre-money valuation of $2.2 billion.
- The deal was led by GV, SoftBank, and Fabrica Ventures. Ten other investors participated in the round.
- Flexport has already raised $1.36 billion through 10 previous equity rounds and one debt raise.
The rapid acceleration of globalization was halted by the economic effects of the COVID-19 pandemic. International trade has rebounded and will reach new heights in 2022 and beyond. Freight technology already plays a critical role in international trade, and this will only increase over time. J&A forecasts the continued expansion in freight technology and an increase in deals and capital deployed within the sector.