Truenorth Raises $50 Million to Support Independent Truckers

TrueNorth Secures $50 Million to Empower Independent Truckers

Jin Stedge, with a background in aerospace engineering from MIT, shifted her focus after experiencing the realities of autonomous driving technology while at Scotty Labs, a spin-out of SRI International. She recognized the significant hurdles to widespread implementation.

From Autonomous Tech to Trucking Efficiency

Following Scotty Labs’ acquisition by DoorDash in 2019, Stedge collaborated with Sanjaya Wijeratne, a senior software engineer at Scotty Labs, to tackle a more immediate challenge: enhancing the operational efficiency of truck drivers.

Stedge’s personal connection to the trucking industry, stemming from her family’s history as owner-operators since the 1980s, provided valuable insight into the daily struggles faced by independent truckers.

Challenging Automation Predictions

She disputed predictions of widespread job displacement for truck drivers by 2027, asserting that the complexities of long-haul trucking – navigating challenging terrains, securing freight, and operating in areas with limited connectivity – present substantial automation obstacles.

The potential market size further fueled their ambition. Numerous startups are actively addressing various facets of the trucking sector, including brokerage, load marketplaces, financial solutions, equipment, insurance, and compliance.

TrueNorth: A Comprehensive Platform for Truckers

Stedge and Wijeratne identified an opportunity to develop TrueNorth, a unified platform designed to streamline operations for truckers. This platform would facilitate customer management, load sourcing and coordination, route optimization, invoicing, and payment collection.

A key feature of TrueNorth is its prompt payment system, addressing the longstanding issue of truckers waiting weeks for compensation.

Providing Fleet-Level Resources

The core concept behind TrueNorth is to equip independent truckers, representing 10-20% of the industry, with the resources and economic advantages typically enjoyed by larger fleets.

Early Funding and Growth

TrueNorth’s vision resonated with Y Combinator, leading to its acceptance into the winter 2020 batch. This was followed by seed funding from Sam Altman and an $8.5 million Series A round spearheaded by Lachy Groom, a former Stripe executive.

The company has recently secured $50 million in Series B funding, co-led by Groom and Altman, alongside Max and Jack Altman, with participation from Flexport Fund, Tribe Capital, Original Capital, K5 Global, 137 Ventures, and Fifth Down Capital.

To date, TrueNorth has raised a total of $61.8 million.

Delivering on Promises and Addressing Challenges

With a team of 50 employees, notably including a 50% female representation, TrueNorth’s immediate focus is on fulfilling its commitments to truckers.

The $50 million in funding, supplemented by $10 million in working capital, is being utilized to ensure timely payments to customers.

Cost Reduction and Revenue Enhancement

TrueNorth is already demonstrably reducing costs for its approximately 200 users, partly through collective insurance purchasing. Independent truckers typically pay $20,000 to $30,000 annually for insurance, whereas TrueNorth members pay $10,000.

The platform also aims to increase drivers’ earnings by connecting them with high-paying jobs and simplifying the booking process.

Reaching a Fragmented Market

A key challenge lies in effectively reaching its target audience, given the fragmented nature of the trucking market. TrueNorth has relied on organic growth, with all customers discovering the platform independently and a 90% referral rate.

However, the company acknowledges the potential need for a more proactive marketing strategy to compete with well-funded rivals.

Competition from CloudTrucks

CloudTrucks, led by Tobenna Arodiogbu – Stedge’s former CEO at Scotty Labs – represents a significant competitor. CloudTrucks recently raised $115 million in Series B funding.

A Growing Market Benefits All

Stedge views CloudTrucks’ success as a positive sign for the industry, indicating growing awareness and investment in solutions for independent truckers. She emphasizes the substantial market size – a $100 billion opportunity within the independent trucking and small fleet segments.

Revenue Growth and Efficiency

TrueNorth currently charges customers a commission of 15-18% of the value of goods transported, a rate lower than the 40% often taken by larger fleets.

The company’s current revenue is estimated between $6 million and $10 million, generated by drivers moving between $30,000 and $50,000 worth of goods annually.

Revenue has increased 3.4 times in the last six months, primarily within its initial markets of Dallas and Atlanta.

Focus on Sustainable Growth

Crucially, TrueNorth is improving its contribution margin, ensuring that sales effectively offset fixed costs. Stedge emphasizes the importance of building a sustainable business model, prioritizing financial efficiency.