Berlin-based ‘digital freight forwarder’ Forto has raised $240m in a funding round led by Softbank’s Vision Fund, giving the company formerly known as ‘FreightHub’ a notional valuation of $1.2bn.
The fundraising also attracted the participation of Citi Ventures, G Squared, as well as its existing investors such as Northzone, Inven Capital, Cherry Ventures, and Unbound. Michael Wax, CEO of Forto and one of its founders, said that the company intended to use the capital to “further accelerate our growth path and roadmap…. 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.”
Softbank has a record of being an aggressive investor in logistics with a string of recent targets, such as FlockFreight into which it poured $500m in December 2020 and AutoStore, an automated materials handling company based in Norway, which it bought for $2.8bn in April 2021.
The raising of such a large amount of capital implies that Forto will become a significant forwarder in Europe. It is unclear what the company’s market impact has been so far, however, the ability to sustain such a scale of investment suggests that it will have some sort of effect on transport markets. Access to such resources will present a challenge to even the largest of the established freight forwarders. All of the leading forwarding companies are attempting to adapt both their operations and their business models to what might broadly be called New Technology, yet it is hard to ascertain any major impact on their results and the market. One effect may be the impact of having to match such huge sums in investment to respond to such competition, not least as many freight forwarders have struggled in the past with managing technology projects.
The implications for the owners of transport assets are probably also significant as they are likely to face buyers with different purchasing criterion. Buyers of forwarding services may be in the happy position of having greater competition in the marketplace.
Source: Transport Intelligence, June 22, 2021
Author: Thomas Cullen