cargo.one Secures $18.6M in Backing
July 31, 2020
has raised $18.6 million in venture funding. In response to rising demand, it
plans to onboard new airlines, grow in additional markets and hire 70 employees,
tripling the size of the company by the end of the year. The company already
counts Lufthansa, All Nippon Airways, Finnair, Etihad, AirBridgeCargo and TAP
Air Portugal among its 12 partner airlines, helping them boost their financial
performance in the face of the challenges posed by Covid-19.
cargo.one’s ambition is to build the global operating system for air cargo. Its
intuitive digital platform makes booking shipments as simple as booking a
holiday or business trip on Skyscanner or Kayak. Because cargo.one links
directly into the airlines’ systems, it is the first product to provide
real-time visibility of available capacity and prices, as well as additional
quality parameters like temperature control.
The Series A round was led by global venture capital firm Index Ventures, with
the participation of Next47 and prior backers Creandum, Lufthansa Cargo and
Point Nine Capital. They were joined by angel investors including Tom Stafford
of DST Global and Carlos Gonzalez-Cadenas, currently Chief Operating Officer of
GoCardless and former Chief Product Officer of Skyscanner. Martin Mignot and Max
Rimpel of Index Ventures led the investment.
The market for air cargo is vital but broken
With 35% of the world’s trade by value being transported by plane, air freight
generates $100 billion in revenue every year. Pre-Covid projections forecast the
market would grow at approximately 4.2 per cent per year. The speed of air cargo
makes it a crucial link in global supply chains – especially for the many
industries that ship in components for ‘just in time’ manufacture, and for
life-saving products such as pharmaceuticals.
As the margin on seats has eroded in the past decade, air cargo was already
increasing as a percentage of passenger airlines’ revenue. As passenger numbers
have tumbled sharply during the Covid-19 pandemic, airlines are relying even
more heavily on cargo. Only around 20 percent of the widebody passenger capacity
is still flying today , and some passenger airlines have even removed seats
to convert aircraft into freighters. At the same time, traditional ways of
selling and booking air cargo by email or phone have become almost an impossible
task, as personnel are working from home – resulting in the rapid adoption of
new digital tools.
‘Right now, booking air cargo is a long and cumbersome manual process, driven by
a ‘feel’ of the market, and a short-termist, reactive approach to sales,’ said
Moritz Claussen, co-founder and Managing Director of cargo.one. ‘With cargo.one,
airlines are meeting customers’ increasing demand for an outstanding user
experience, while substantially lowering their costs to reach new customers and
Air freight is booked via companies known as freight forwarders, who organise
shipments and supply chains for shippers. They fire off rounds of emails every
day to airlines, in order to get offers for freight services - often without
comprehensive visibility of the services available. They then wait to receive
emailed replies, and sift through the individual quotes to obtain the best price
and specifications for their shipments. This process leads to long wait times,
high transaction costs and an inefficient use of the cargo space available.
cargo.one unifies a fragmented sector
As well as its partner airlines, cargo.one is serving more than 1,500 freight
forwarding offices, including 21 of the top 25 companies globally . From
January to June 2020, cargo.one saw the number of air cargo search requests by
freight forwarders quadruple. The number of quotes distributed in that time
increased by two thirds, while in June alone, cargo.one made more than 1.1
million bookable air freight offers available to freight forwarders.
‘The new era of air cargo is being driven by universal access to real-time
data,’ said Oliver T. Neumann, co-founder and Managing Director of cargo.one.
‘It’s essential that the industry has access to tools that allow players to both
respond and anticipate market dynamics. From day one, cargo.one has provided
freight forwarders with an outstanding user experience and access to real-time
data. We now plan to accelerate the release of major product additions that will
increase the connectivity between freight forwarders and airlines, and empower
them to work more effectively together.‘
In the next phase of its growth, cargo.one will expand to North America and East
Asia, to fulfill airlines’ desire to be able to sell globally though cargo.one
and serve freight forwarders around the world. It will also build tools that use
data to let airlines offer more dynamic pricing, engage in better route planning
and predict demand in volatile markets.
‘The airline sector relies on operational excellence, but its back-end
infrastructure is stuck in the dark ages,’ said Max Rimpel, Principal at Index
Ventures. ‘cargo.one’s platform doesn’t just help to bring air cargo bookings
into the 21st century, but lays the foundations for a complete overhaul of how
the air cargo industry operates, leveraging data to help both airlines and
freight forwarders to run their cargo operations more efficiently.’
three co-founders Oliver T. Neumann (MD), Moritz Claussen (MD) and Mike Rötgers
(CTO), have been long-standing friends and business partners since university.
They co-founded several businesses, including OptioPay, a payments company.
Through friends, they became interested in the fragmented logistics market, and
discovered the potential for cargo.one after interning (for market research
purposes) with a freight forwarder. When they saw the arduous process by which
he booked a shipment of 470kg milk powder to be sent to China, they realised the
potential for a business.
Miguel de Paiva Gomes, Global Chief Cargo Officer of TAP Portugal Airlines, a
partner airline that recently joined cargo.one’s platform, commented: ‘cargo.one
supports us to distribute our air freight capacity more effectively, gain access
to fragmented demand and to improve the cargo booking experience for our valued
freight forwarding partners. Many businesses rely on air cargo to keep their
supply chains running, and our partnership with cargo.one is part of our
dedication to help them to operate and expand their business in these
Martin Mignot, Partner at Index Ventures, said: ‘cargo.one has formed close
partnerships with major global airlines, who have subsequently seen their cargo
business expand significantly. Conversations with dozens of other airlines in
the Americas and Asia show the clear need for a simple booking engine for air
cargo, and early signs of the far-reaching impact it will have on the airline
industry and businesses around the world who rely on it to serve their