LONDON (Reuters) - Freight logistics start-up OnTruck has raised 25 million euros ($28.8 million) to fund expansion across Europe after initial success in Spain and a recent move into London demonstrated the value of its novel short-haul strategy, the company said on Wednesday.
Madrid-based OnTruck aims to automate the highly fragmented market for local and metropolitan freight transport in Europe by matching freight loads to empty trucks using location tracking, while assuming full responsibility for shipment delivery.
Founded by serial entrepreneurs from the online food delivery business, the firm says it brings greater efficiency to the short-haul freight industry where an estimated 40 percent of return journeys by local carriers are empty loads.
“We are able to offer more shipments in the same amount of time,” OnTruck CEO Iñigo Juantegui said in a phone interview. “Truckers earn more money from increased volume, meaning we can reduce shipping costs but still have very good margins.”
OnTruck has attracted shipping clients including Procter & Gamble, sporting goods retailer Decathlon and more than 400 mid-sized companies in Spain and Britain. It also offers excess capacity for big online delivery firms it declines to name.
It steers clear of long-distance transport, which traffics in far larger freight volumes but is dominated by big firms operating vast fleets of trucks at far lower margins.
The Madrid-based company has raised a Series B round led by global venture firm Cathay Innovation and joined by new London-based investors along with existing investors including European venture firm Atomico.
Juantegui said the new funding will help consolidate its position in Spain and Britain as well as expand into Europe.
“We are studying France or Germany as our next markets. We will open in one of those markets by the end of the year, maybe both,” he said.
So far, the company has been gaining traction in Madrid and Barcelona and has opened up marketplaces in Valencia the Basque country, Juantegui said.
It expanded into London in 2017, which he said was growing faster than Spain, and the company is considering moves to develop marketplaces in Birmingham and Manchester eventually.
Reporting by Eric Auchard in London; Editing by Gopakumar Warrier