CloudTrucks Raises $115M Series B to Empower Truck Entrepreneurs

CloudTrucks Secures $115 Million to Empower Trucking Businesses

CloudTrucks, a California-based company, is leveraging technology to support trucking entrepreneurs. The startup provides business management software designed to assist owner-operators with crucial tasks like cash flow management, expense tracking, revenue generation, and insurance handling. Recently, CloudTrucks successfully closed a $115 million Series B funding round.

Expansion and Investment Plans

The newly acquired capital will be strategically allocated to expand the company’s operations and increase its workforce across the United States. CloudTrucks is actively recruiting professionals in various departments, with a particular emphasis on engineers and data scientists to enhance product development. Furthermore, the company intends to bolster its customer support team to better serve truckers on the road.

A key objective is to deepen digital integration with brokers and shippers, streamlining processes for all parties involved.

Addressing the Challenges Faced by Trucking Entrepreneurs

“We focus on owner-operators and truck drivers who manage one or more trucks, handling both the transportation of goods and the complexities of running a business,” explains Tobenna Arodiogbu, co-founder and CEO of CloudTrucks. “The challenges facing trucking entrepreneurs are escalating, with a disproportionate amount of innovation directed towards brokers and shippers, while the drivers performing the essential work receive insufficient support.”

The Growing Demand and Driver Shortage

Freight transportation is projected to increase significantly, rising from 17.4 billion tons in 2015 to 25.5 billion tons by 2045. This growth coincides with a concerning decline in the number of available truck drivers. The industry has consistently experienced high driver turnover since the 1980s, largely due to inadequate compensation and the detrimental health impacts of the profession.

According to Deloitte, without substantial changes to the current business model and workforce, the truck driver shortage is anticipated to reach 160,000 drivers by 2028.

The Future of Trucking: Automation and Human Collaboration

While autonomous trucking holds the potential to alleviate labor shortages, its widespread implementation is expected to take decades. Deloitte suggests a future where human drivers manage first- and last-mile deliveries, while self-driving systems handle long-haul highway transport. Waymo Via’s transfer hub model exemplifies this integrated approach.

A Significant Market Opportunity

Despite the long-term vision of driverless vehicles, Arodiogbu identifies an immediate market need. The Owner-Operator Independent Drivers Association estimates around 350,000 owner-operator truckers in the U.S., but Arodiogbu believes the potential market could be as large as one million drivers.

These owner-operators typically own a single truck, operating either under lease to a carrier or independently. CloudTrucks also serves entrepreneurs managing fleets of up to five trucks, as well as independent contractor truckers.

From Scotty Labs to CloudTrucks: A Founder’s Insight

Prior to establishing CloudTrucks, Arodiogbu founded Scotty Labs, a startup focused on remote operations and autonomous driving solutions for the trucking sector. DoorDash later acquired Scotty Labs. Through this experience, Arodiogbu gained valuable insights into the difficulties truck drivers face in managing their businesses and the factors contributing to the ongoing driver shortage.

These challenges include difficulties in making profitable business decisions, increasing costs related to insurance and compliance, and prolonged payment cycles.

The Desire for Independence and Control

“The role of a truck driver extends far beyond simply driving; it encompasses a multitude of management responsibilities,” states Arodiogbu. “An increasing number of drivers are seeking independence from traditional employment, desiring control over their schedules and the ability to prioritize family time.”

CloudTrucks’ Suite of Solutions

Over the past year, CloudTrucks has launched three products to address these challenges:

• CT Cash: Provides drivers with faster payment options, including instant pay, cash cards, and cash advances, to ensure sufficient funds for essential expenses like fuel and maintenance.
• Flex: Offers back-office support for small trucking businesses already handling their own insurance and compliance.
• Virtual Carrier: Places drivers under CloudTrucks’ authority, providing comprehensive management of compliance and insurance.

Both Flex and Virtual Carrier include a “schedule optimizer” – described by Arodiogbu as a “dispatcher in your pocket” – which leverages CloudTrucks’ system-wide data to suggest revenue-maximizing loads based on driver preferences and geographic limitations.

Business Intelligence for Informed Decision-Making

CloudTrucks also offers a Business Intelligence dashboard, providing drivers with a clear overview of their performance, expenses, and revenue.

“Tracking is essential for improvement, and we designed this product to provide trucking entrepreneurs with a simple, at-a-glance view of their business performance directly within the CloudTrucks app,” says Arodiogbu.

Impressive Growth and Funding

CloudTrucks reports a 9.5x increase in revenue since its $20.5 million Series A funding round in December 2020. The number of loads completed on the platform has grown 8x in the past year, although the company did not disclose the initial figures for these increases. Arodiogbu confirms the company processes thousands of loads monthly nationwide.

The Series B funding round was led by Tiger Global, with participation from Menlo Ventures, Flexport, and angel investors Michael Ovitz and Eric Wu (CEO of Opendoor), bringing the startup’s total funding to $141.6 million.