HappyRobot Raises $15.6 Million Series A Funding Led by a16z to Transform Logistics with Agentic AI
HappyRobot, a pioneer in AI-powered voice solutions for the logistics sector, today announced it has secured $15.6 million in Series A funding.
We were curious when we saw that Trimble spent a whopping $2 billion USD on a freight tech company in Europe called Transporeon, especially after Trimble recently closed down another recent acquisition called Kuebix that they just bought in 2020 for $201 million USD.
So, we asked our resident expert, Tim Higham, the CEO and founder of AscendTMS, a popular freight TMS software company with our readers (and a FreightCaviar sponsor) what this means for the industry and freight tech in general.
Paul-Bernard Jaroslawski (PBJ): Tim, will this deal by Trimble fix all the problems we all face in logistics in North America?
Tim Higham: Ha! Good one, Paul. No, it won’t. But it’s another piece of the puzzle. Digitizing trucking and logistics is going to be an ongoing two-decade process, and this is a vote of confidence by Trimble in that process. Also, Transporeon mainly operates in Europe, and it will take time for an Americanized version to be brought to the United States.
PBJ: Why did Trimble spend $2 billion USD on them? That’s a lot of money, especially after the Kuebix closure. Is Transporeon profitable?
Tim Higham: I have no idea if Transporeon is profitable as they are (were) privately held. But, Trimble stated publicly that the deal would be immediately accretive to Trimble’s revenue growth and margin profile and that they (Transporeon) generated profitable growth over the past 15-plus years. So, this leads me to believe that they are indeed profitable. To me, being profitable means that Transporeon is proven and they have a product that clearly meets a need in the market. Profitability says a lot about market acceptance for any product.
PBJ: Can Trimble easily bring Transporeon to the North American market?
Tim Higham: As a Brit, yet growing our own highly profitable TMS software company in North America, I can tell you that there are a lot of differences between how logistics work in Europe versus North America. Today, AscendTMS is the most widely used TMS platform in the USA, with paying customers, mainly by accident, in over 30 countries today. So, I can tell you from the front lines that every jurisdiction around the world has particular needs, and there is no all-in-one solution that will translate easily between Europe and the USA. So that’s why the major US freight tech providers aren’t big in Europe and vice-versa.
Moreover, the largest companies in North America already have very sophisticated supply chain technology in place, so displacing that will be challenging and take time. When Transporeon started in Europe in 2000, their technology solutions had little competition, and thus it was easier to get a fast market share. However, today in North America, there’s a lot of entrenched technology that will need to be displaced in order to get a foothold, especially in the top end of the market.
PBJ: So, how does Transporeon get a share of the market in the US?
Tim Higham: They’ll probably start by getting one or two of their niche products into a company that meets a particular need, and they’ll likely use that success as a door opener. Then, over time, they’ll hope to further open the door to more of their products as opportunities arise.
Also, their new owner, Trimble, already has a substantial market share of their own existing trucking and logistics technology in North America. So, as the natural technology replacement cycle takes place, Trimble will now have a series of new products and services to offer their existing customers rather than losing them to newer freight tech competitors. So it’s a smart strategy, but it’s a long-ball game.
PBJ: Will this deal help digitize the industry?
Tim Higham: As I’ve said publicly many times, the main issue with freight technology is that getting the top 5% or so of shippers, carriers, and brokers connected and integrated digitally is pretty straightforward. This is because the largest players have big tech budgets and large IT teams. But, if only 5% of the industry is ready to connect with each other, it only works as long as they are working with each other.
Unfortunately, the fact is that the other 95% of the industry, the SMB player, has little to no technology budget and no IT team. So, how do they participate in this digital evolution?
The smaller market players with under 20 trucks or under $20 million USD in sales (as a 3PL) or freight spend (as a shipper) represent over 95% of the entire market, and they need cheap, simple, and fast to deploy solutions in order to participate with the more sophisticated top 5%.
If you leave the smaller companies out of the freight tech evolution, true digitization across the industry will never become a reality. It’s on the entire industry to invite them in.
PBJ: So how can that be fixed?
Tim Higham: It’s already happening. The largest shippers, 3PLs, and technology players are already handing out tools, like AscendTMS, to the smallest players to help to get them digital.
Don’t be fooled that this is a purely altruistic endeavor, though. The most prominent players have realized that if they want to truly see the efficiencies of digital freight and logistics processes hit their balance sheet, they need every single vendor, customer, and partner to be capable of doing business digitally. That’s why many of them today literally give away AscendTMS to their SMB partners so they can participate with them. And in turn, both parties see a rapid reduction in costs and the resulting increase in profits.
PBJ: How long will this all take?
Tim Higham: To use an American baseball analogy, my guess is that we’re only in the 2nd inning in North America. Today over 51,300 trucking, logistics, and shipping companies use AscendTMS, and they all benefit from digital freight technology. But that’s still a tiny part of the total addressable market in North America and even smaller when you look globally.
The good news is that we see more and more large industry leaders helping to educate the smaller players about the available freight software solutions, like AscendTMS, so they can easily participate and realize cost savings themselves.
The pace and urgency are already increasing, and there’s a lot of opportunity for the likes of Trimble and Transporeon over the coming decades to help bring the entire market toward a fully digital future.
Yes, this will all take time. But the good news is that AscendTMS, like Trimble and Transporeon, have shown that there is an eager market for our solutions, and it can be done profitably along the way.
PBJ: Tim, as always, thanks for your expert insight on this subject and for helping us all to understand the freight tech world.
Tim Higham: My pleasure, Paul.
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