SAN FRANCISCO (Reuters) - The latest startup aiming to bring new technology to the business of moving around cargo has raised $20 million in fresh funding, bolstering an already record year of fundraising for companies in the shipping and logistics sector.
The chief executive of Airspace Technologies, a nearly 3-year-old startup based in Southern California, told Reuters it raised the money in a funding round led by Silicon Valley-based firm Scale Venture Partners, with help from existing investors including Qualcomm Ventures.
The company plans to extend the round and raise more money from additional interested investors, said Airspace co-founder and CEO Nick Bulcao.
The company is part of a roster of more than 125 startups working on technology for shipping, fleet management, warehousing, logistics and last-mile delivery services, according to a tally by data firm CB Insights.
Airspace Technologies’ focus is on time-critical shipping, getting blood samples delivered to a lab, an organ to a hospital or a mechanical part to a grounded airplane or stalled manufacturing plant.
The startup’s technology includes a Web-based application where shippers can get prices and route information, and real-time tracking for companies receiving the shipment. Another piece is a smartphone app for drivers who, similar to Uber drivers, have their locations tracked and are dispatched to pick up goods to be brought to and from airports for air travel.
The drivers have security clearance to transfer the goods at airport cargo facilities. Airspace Technologies works with Delta Air Lines, American Airlines Inc, Southwest Airlines Co, United Airlines Inc and other major airlines, Bulcao said.
“Amazon has changed the way that consumers buy and expect their shipments in the same day,” Bulcao said. “But the businesses really haven’t caught up to that until now.”
The funding brings the company’s valuation to about $100 million, up from about $20 million in its last funding round in August, according to data firm PitchBook Inc and a separate source with knowledge of the matter.
‘AN OPPORTUNITY HERE’
The opportunity to transform large, critical industries that at times still depend on handwritten logs and fax machines has captivated tech investors. Venture capitalists have so far this year poured $10.5 billion into startups in the field, not quite triple the $3.9 billion invested last year, and more than any of the previous three years, according to CB Insights.
“Anything where you just need something in a time-sensitive way, where time is money, there is an opportunity here,” said Stacey Bishop, a partner at Scale Venture Partners who will join Airspace’s board of directors.
But Airspace and its fellow startups are up against large incumbents including UPS Inc, DHL, FedEx Corp and Walmart Inc that are also experimenting with technology such as robotics and blockchain to make delivery more efficient and easier to track. Their efforts have already forced some consolidation among startups.
“What you worry about is what the incumbents can do,” Bishop said. “Can Airspace get enough market share before the incumbents wake up?”
Reporting by Heather Somerville; Editing by Peter Cooney
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