Berlin, Germany, is a fertile breeding ground for log-tech start-ups, home as it is to the likes of cargo.one, Instafreight, sennder, and 58* others. And it is home, now, to its second unicorn. Just 6 months after sennder hit the headlines as Europe’s first log-tech unicorn, digitized freight forwarding and supply chain solutions provider, Forto, too, has joined the hallowed unicorn ranks, having raised $240 million in a recent SoftBank Vision led funding round.
You may remember it as FreightHub, the name it started out with in 2016, before this was changed to Forto in April last year to reflect its transition from having rapidly become one of the Top 10 sea freight forwarders (and a digital one at that) from Asia to Germany, to offering data-driven technology solutions and services across the entire logistics industry – including air cargo. The motto behind its founding was “Shipping should be as simple as sending an e-mail,” as Michael Wax, CEO and Co-Founder (along with Erik Muttersbach, CTO and Co - Founder), revealed in a Forbes DACH interview on 12JAN21, having been motivated to bring the comparatively antiquated logistics industry to the level and simplicity of Uber and Amazon orders. And the name change? “In Latin, the word ‘fortis’ means ‘strong’. In today’s business landscape, one marked by uncertainty and rapid change, to ‘fortify’ means to strengthen or give strength,” Forto’s press release from 29APR20 explains. Just how important strength and resilience in logistics is, has been made painfully clear over the past year.
There is money in simplifying world trade
Bringing simplicity, efficiency, and reliability to supply chains, and empowering customers to gain transparency over their own supply chains, is a winning formula in an industry where three-quarters of companies report problems in cooperating with their supplier base, and even more (85%) are held back by inefficient digital technologies. Forto’s technological solutions in this regard, have – with the latest $240 investment – netted it $360 Million in funding to date, and the company is now valued at an impressive $1.2 Billion, and rising. “Logistics is the backbone of global commerce, and data analytics, machine learning, and process automation will reshape the global delivery of goods and services,” Karol Niewiadomski, senior investor for SoftBank Investment Advisers, underlines. “Forto’s centralized platform leverages these technologies to boost operational efficiency, lower handling costs, and increase transparency for their customers. We’re pleased to partner with Michael and his team as they continue to scale the business internationally.” As key investing company, Nahoko Hoshino will represent SoftBank Investment Advisers on the Forto Board.
Global reach and optimizing supply chains
“With this investment we are able to further accelerate our growth path and roadmap,” Michael Wax, CEO and Co-Founder of Forto, illustrates. “In our effort to further digitize global trade, we plan to significantly expand our geographical footprint, technology platform, and customer operations, to cement our market leadership in Europe and beyond.” Forto grew more than three-fold during the COVID-19 crisis, expanding its European and Asian operations with new offices, and bringing on board another 200 staff remotely during that year; “Many of whom I have yet to get to know,” Wax discloses in the Forbes interview, where he lauds the possibilities of digitalization in enabling greater social equality, allowing people to work remotely and better balance their time.
The company plans to recruit another 1,000 employees over the next two years. Social equality is one of two key value drivers close to his heart.
Sustainability is the other, and given that global transportation is a major cause of CO2 emissions, Forto also offers CO2 transparency to its customers based on the routes and channels they opt for. “Already more than half of Forto customers leverage the company's carbon-offsetting offer, and Forto has implemented the "1+1 Approach" — a program in which Forto doubles the CO2 compensation of every customer to move towards climate-positive transports,” the press release states. Forto itself, has “been CO2 neutral since Day 1,” Wax emphasizes, even to the point of ordering vegan catering for its events, as one example.
More intelligent decisions – also financially
Smooth financial transactions also drive greater supply chain efficiency, and the latest investment will serve to include finance solutions in Forto’s platform, as Luis Valdich, Managing Director of Investing at Citi Ventures, points out: “There is a significant opportunity to improve global supply chains by seamlessly embedding trade finance into digital solutions. Forto’s platform is addressing points of friction to ease the flow of goods alongside the flows of data and money.”
Forto recently appointed Guillaume Petit-Perrin (ex- J.P. Morgan Managing Director in its TMT Investment Banking group) to Chief Financial Officer, in this regard, along with other key appointments in the areas of technology and sales. Regarding the latest $240 investment, the Forto press release points “The transaction remains subject to statutory closing conditions and is expected to conclude in the next few week.”
Given the ongoing, astronomical growth that many of the log-tech start-ups are experiencing, it will, without a doubt, be money well invested.
*There are 61 log-tech start-ups in Berlin currently, according to
https://tracxn.com/explore/Logistics-Tech-Startups-in-Berlin published 10JUN21
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