Zencargo Raises $42M to Expand Global Freight Platform

Streamlining Global Trade: Zencargo Secures $42 Million Investment

As both consumers and businesses drive the global economy through their purchasing decisions, companies are emerging to enhance the efficiency of this economic engine. Zencargo, a firm specializing in a technology platform designed to optimize trade operations, has announced a significant investment to accelerate its expansion.

Expanding Operations and Services

Zencargo has successfully secured £30 million (approximately $42 million) in funding. According to Alex Hersham, the CEO and co-founder alongside Richard Fattal (CCO) and Jan Riethmayer, the London-based company intends to utilize these funds to establish new offices in the Netherlands, Hong Kong, and the U.S.

Furthermore, Zencargo plans to more than double its workforce, increasing its headcount from 150 to 350 employees. The company will also initiate a strategic move into trade finance, a crucial component for supporting the trading activities central to Zencargo’s core business.

Investment Details and Financial Projections

This Series B funding round is spearheaded by Digital+ Partners, with continued participation from HV Capital, who led the previous investment. While Zencargo has not disclosed its current valuation, the company projects revenues of £100 million this year, escalating to £200 million in 2022.

Zencargo serves a diverse clientele, including both businesses and distribution networks like Amazon, as well as prominent brands such as Vivienne Westwood, Swoon Furniture, and Soho Home, facilitating the shipment of their goods.

Navigating Global Challenges and Opportunities

Recent global events have presented both obstacles and opportunities for the startup. Brexit has complicated the movement of goods between the U.K. and Europe, though Zencargo assists clients in navigating these complexities.

The COVID-19 pandemic, while disruptive, has also spurred increased consumer spending on goods rather than travel, thereby boosting demand for global shipping services. The ongoing repercussions of the Suez Canal blockage continue to be felt, underscoring the importance of diversified shipping strategies – utilizing sea, air, and road transport.

Additionally, the growing emphasis on minimizing the carbon footprint of shipping presents an area for innovation, where Zencargo can offer efficient routing and carbon offsetting services.

The Complexity Behind Seamless Consumer Experiences

Consumers often expect immediate access to desired products, without considering the intricate logistics involved. This simplicity masks a vast and complex operation.

The process encompasses component sourcing, assembly, production, transportation, distribution, customs clearance, retail, and final delivery – a global supply chain estimated to be worth up to $12 trillion annually. Freight forwarding is the essential process that ensures this logistics network functions effectively, representing hundreds of billions of dollars in expenditure, and potentially exceeding $1 trillion when disruptions occur.

Digitizing Freight Forwarding

Traditionally, freight forwarding relied heavily on offline processes, involving paperwork and faxing, leading to errors and inefficiencies. Companies like Zencargo and Flexport are revolutionizing this sector with digitized platforms.

These platforms track shipments using SKU data, align shipments with real-time sales and demand insights, and optimize freight options to ensure timely delivery. Zencargo manages freight across sea, air, and land, with sea transport accounting for approximately half of its volume.

Looking Ahead: Continued Growth and Innovation

Demand for Zencargo’s services is expected to grow alongside the expanding logistics industry. However, recent global events highlight the challenges and opportunities that lie ahead for the startup.

“The freight industry has struggled to keep pace with innovation. Archaic processes are still in place across the board, resulting in widespread inefficiencies,” stated Patrick Beitel, managing director and founding partner at Digital+ Partners. “Zencargo’s cutting edge technologies, plus deep industry experience and knowledge, are transforming the supply chain, and that marries up perfectly with Digital + Partners’ mission to back companies with best-in-class technology and exceptional management teams. We are honoured to join them on the next stage of their journey.”