Freight forwarding AI start-up Vector.ai has raised US$15 million in a Series A funding round.
The company’s stated aim is to tackle the growing productivity crisis in international freight forwarding, now a US$199 billion market.
Vector.ai said the funding would enable it to accelerate its international expansion plans. The company uses machine learning to automate inefficient and error-prone processes, providing services from straight-through processing of accounts payables to automated customs declarations and import/export documentation workflows.
“Most employees within freight forwarders spend the majority of their time communicating with the 10-25 different entities that might be associated with a given shipment and coordinating freight movement and documentation,” said Vector.ai co-founder and CEO James Coombes (pictured above left, with co-founder and CTO Nisarg Mehta).
“Communication usually runs through email and attachments, so freight forwarders spend countless hours sorting through documents and manually copying data into a transportation management system (TMS), their core system of record. But they’re spending far too much time gathering data rather than analysing it, and they’re using outdated tools which are no longer fit for the complexity of today’s operational and logistical demands.
“What’s more, as the volume of freight continues to rise globally – and with the added burden of Brexit and pandemic disruptions such as the recent port closure in China – freight forwarders are facing staffing shortages, steep wage increases, and shipping delays that continue to cost companies money in lost revenue and spoiled goods. They cannot afford to keep wasting time on low-level processing, which is why we created the technology to automate basic tasks.
“Over the last three years, our team of experts have been building a platform designed to embed machine learning across multiple data sources and functionalities. We are increasing people’s productivity at work through actionable automation. I don’t see any freight forwarder being able to operate competitively in the next few years without technology like ours.”
The funding round is led by US venture capital company Bessemer Venture Partners and is joined by existing investors Dynamo Ventures and Episode 1.
Mike Droesch, partner at Bessemer Venture Partners, said: “Vector.ai is one of the early leaders in an emerging category of freight forwarding workflow automation and digitisation tools. It has built an intuitive and industry-focused product – which is already winning over some of the largest freight forwarders – and a team that can deliver outstanding execution. We look forward to helping them continue their mission to transform this operations-intensive industry.”