vector.ai Raises $15M to Boost Freight Forwarder Productivity

The Rise of Digital Freight Forwarding

Ongoing disruptions to global supply chains, exacerbated by the pandemic, have propelled freight forwarding into a prominent startup arena over the past two years. Currently, the international freight forwarding market is valued at $199 billion, and supporting data continues to emerge.

Recent Investment Trends

Significant investment activity highlights this trend. In November of the previous year, Forto, a digital freight forwarder, secured $50 million in funding led by Inven Capital.

Further demonstrating investor confidence, Nuvocargo received $12 million in April to advance digitization within the freight logistics sector.

Zencargo, operating a freight-forwarding platform, followed in May with a $42 million raise. Then, in June, sender, a freight forwarder, achieved a valuation exceeding $1 billion after raising $80 million.

July saw Freightify obtain $2.5 million, focused on streamlining rate management for freight forwarders.

Vector.ai Secures Series A Funding

Today, Vector.ai, a company focused on enhancing freight forwarder productivity through its AI platform, has announced a $15 million Series A funding round. This round was spearheaded by U.S. venture capital firm Bessemer Venture Partners, with participation from existing investors Dynamo Ventures and Episode 1.

Bessemer’s investment signifies a growing trend of U.S. venture capital firms expanding their presence within the U.K. and European technology landscapes.

Expansion Plans and Problem Statement

Vector.ai intends to utilize the new funding to accelerate its international expansion as an automated solution for freight forwarders.

The core issue Vector.ai addresses is the substantial time freight forwarders spend on repetitive administrative duties during shipment execution. This includes tasks like sifting through email correspondence, diverting attention from more strategic, high-value activities.

Vector.ai asserts that its machine learning platform is capable of automating these time-consuming processes.

Current Clientele

The company’s customer base includes prominent names such as Fracht, EFL, NNR Global Logistics, The Scarbrough Group, Steam Logistics, and Navia Freight, alongside other leading freight forwarding organizations.

Industry Perspectives

James Coombes, co-founder and CEO of Vector.ai, stated: “A significant portion of time for employees in freight forwarding is dedicated to communication with the numerous parties involved in a shipment – often 10 to 25 entities – and coordinating freight movement and documentation.

This communication frequently occurs via email and attachments. Global freight volumes are increasing, and factors like Brexit and pandemic-related disruptions, including the recent port closure in China, are creating staffing shortages, rising wages, and ongoing shipping delays.

These issues translate to lost revenue and damaged goods for companies, making the elimination of time wasted on basic processing crucial. This is the impetus behind our automation technology.”

Mike Droesch, partner at Bessemer Venture Partners, commented: “Vector.ai is establishing itself as a frontrunner in the emerging category of freight forwarding workflow automation and digitization tools.

They have developed a product that is both intuitive and specifically tailored to the needs of the industry, already attracting significant interest from major freight forwarders.”

Competitive Landscape

Vector.ai operates within a competitive market, facing competition from companies such as Shipamax (U.K., $9.5 million raised), RPA Labs (U.S., $1.2 million raised), and slync.io (U.S., $75.9 million raised).