Two of Europe’s leading digital road freight platforms are joining forces with ambitions to become one of the region’s largest road freight players by 2024. Ti spoke with sennder’s David Nothacker and Everoad’s Max Lagardez to understand the tie-up and what the new combined entity has planned.
“The ambition is €1bn in revenue by 2024”, says Everoad CEO Max Lagardez of what is a lofty goal in the European road freight market. David Nothacker, sennder’s co-founder and Managing Director, it turns out, had also independently set the milestone, a key point in time and development by which both have come to believe there will be clear winners in European road freight’s digitalisation.
Reaching the target will undoubtedly be challenging. Europe’s road freight market is vast and fragmented. More than 500,000 carriers are active in the region, and in 2019, Ti data shows the top 20 providers had a combined market share of just 12.6%. The market is also mature, and Ti’s ranking also shows that only 12 companies currently have revenues in excess of the €1bn mark.
In that context, the target appears hugely ambitious for a company that will still be less than a decade old in 2024. It’s worth noting, then, that alongside their shared target for the future is a shared vision that has underpinned the development of sennder and Everoad to this point – that solving the market’s fragmentation, underutilisation and inefficiency problems with the application of innovation and technology is the key to unlocking huge value.
From that shared vision and ambition comes the motivation for combining the businesses. David and Max give the impression of two founders, and in their companies also two cultures, clearly aligned. Their separate paths have brought them to a shared understanding and vision at a key point in the development of their now single business.
With the deal in place, Everoad’s operations in France will remain, with sennder gaining a foothold in one of Europe’s most significant markets for the first time. The other efforts of both companies will be combined, extending and deepening scale, coverage and technological capabilities. Certainly, the business will now have a scale advantage over its start-up peers. Post-deal, David and Max assert the business will be the largest independent digital freight forwarder in European road freight, with 4-5x the revenue of the second largest player and a headcount of over 400 as well as near-complete coverage of Europe and a position as the funding leader with more than €120m in venture backing to date.
The advantage over other digital players attacking the same challenges in the market is important. The founders point out funding success in the past and will need more in the future. There are already plans for “a growth round” of funding later in 2021 and into 2022, by which time those VCs with money to spend “will be looking to back winners.” This deal is designed to ensure sennder and Everoad is one of those winners.
The significance of the deal lies in the €1bn ambition behind it. If this can be attained, then the company will have the benefits of both its technological capabilities and scale comparable to the largest operators in Europe. With its timing and in setting their target firmly amongst those players, the impression is that both David and Max are well aware of this. Half a decade of digitalisation in European road freight has proven the concept, and while the market isn’t yet a digital one, momentum is fast gathering pace. The deal looks set to prepare sennder and Everoad for the reality of the next five years, now it’s for the rest of the market to start playing the new game.
Source: Transport Intelligence, 09 June 2020
Author: Transport Intelligence