FreightWaves, the Chattanooga-based media and data startup focused on the freight industry, has raised a $21 million Series B from strategic institutional, corporate and individual investors. The round was led by existing investor 8VC, with participation from new investors including corporate venture arms Hearst Ventures and Prologis Ventures, and former Tennessee U.S. Senator Bob Corker.
In fact, every institutional firm who previously invested in FreightWaves participated in this round: Bill Ford’s Fontinalis Ventures, Revolution’s Rise of the Rest Seed Fund, Pritzker Group Venture Capital, Ascend Venture Capital, Story Ventures, and Engage Ventures.
FreightWaves’ founder and CEO Craig Fuller says this round was purely for strategic purposes. The three-year-old startup’s revenue has been steadily increasing, as Fuller cites projections for a very successful year closing at a $30 million run rate. They also closed their Series A of $13 million only last year.
FreightWaves is both a media and a data analytics business, combining the two in a model akin to Bloomberg. Their digital news platform is the leading provider of information on the global freight market in the world. It is syndicated on over 70 publications such as Yahoo Finance and Benzinga, which result in over one billion potential impressions each day.
Last week, they launched a radio show on satellite radio. Fuller says they’re now planning an over-the-top television network wholly focused on the freight industry.
The media business is where the investment from Hearst Ventures, the corporate VC arm of media conglomerate Hearst, will provide strategic.
“They have experience in data, but also in converting from traditional media, where it’s more advertising-based, to digital media where it’s a combination of advertising but also recurring revenue,” Fuller explains. “They’ve made that switch successfully where a lot of media companies have struggled.”
On the data side, FreightWaves released its SaaS SONAR dashboard last summer. SONAR is the first — and thus far, the only — data and analytics platform for freight markets. Again, it’s comparable to Bloomberg finance data terminals.
Fuller says the dashboard is growing at double-digit rates each month, with over 100 companies using the product right now.
FreightWaves is also working on new data-based products, most notably the first financially-settled Trucking Freight Futures contracts. Those will launch publicly at the end of March.
In the future, Fuller says they plan to look at ways to use data analytics to optimize sectors tangential to the freight industry, such as warehousing. That’s where the investment and partnership with Prologis, the largest owners of warehouses in the world, comes in.
Prologis has operations in 19 countries across four continents, with more freight passing through their warehouses than UPS and FedEx combined. Fuller says they’re constantly looking for data to help manage that freight better.
He’s looking ahead to the two companies working together to commercialize products to better operationalize warehousing.
“They can take our products into markets, they can help us understand how their customers think. For example, we know where to put a warehouse, we know which warehouses are more efficient than others. That data becomes incredibly valuable,” Fuller says.
“Prologis Ventures has been working closely with the FreightWaves team to map out electronic logging device (ELD) location data,” said Prologis Ventures managing partner Will O’Donnell in a statement. “We expect to leverage this data to understand how logistics facilities can operate more efficiently by improving the interaction of trucking companies, shippers and warehouse operators across the many facets of the modern supply chain.”
FreightWaves currently has about 85 employees, most based in their Chattanooga, TN headquarters. At the end of last year they announced their commitment to bring about 300 new jobs to the southern city over the next few years.
Fuller says this year will see the team about double, with hires being made on both the media and technology side.
This investment in Chattanooga is part of what initially attracted Revolution, AOL founder Steve Case’s VC firm focused on startups in between the coasts, to FreightWaves.
“In the Third Wave of the internet, entrepreneurs seeking to disrupt major real-world industries will focus on scaling in cities where that sector expertise resides. They will also rely on key partnerships to provide credibility and industry guidance,” said Case in a statement.
“FreightWaves embodies both of these concepts by combining Chattanooga’s history of logistics expertise with data from collaborations with some of the most important participants in the transportation ecosystem,” Case said.
Fuller says Case’s experience in building an Internet company in the early stages of the digital revolution is invaluable.
“In many ways the digital media business and e-commerce and retail industries in the ’90’s is happening in the mobility sector right now,” he says.
Photos by Josh Roden
