December 17, 2020: Berlin-based digital booking platform for air cargo, cargo.one, has raised $42 million in Series B funding. The news follows months after the company received Series A funding of $18.6 million to expand to North America and Asia in July.
Lufthansa Cargo which has its interests in digital platforms owns a minority stake in cargo.one, after investing in US-based Fleet Logistics in 2018.
Also Read: Lufthansa Cargo acquires stake in cargo.one
"We are pleased to see cargo.one’s continued rapid growth and look forward to leveraging their expansion into new markets like North America and Asia," commented Peter Gerber, chairman and CEO of Lufthansa Cargo.
The Series B investment is led by Bessemer Venture Partners, joined by existing investors Index Ventures, Creandum, Point Nine and Next47, to fund cargo.one’s expansion in North America. The platform signs three new airlines to meet increased demand for digital air cargo booking and facilitates the transport of 180 tonnes of air cargo per day.
The funding round comes as demand for air cargo capacity continues to soar, with e-commerce sales projected to grow between 25 percent and 35 percent this holiday season compared to last year’s 14.7 percent increase, and with air cargo parcel volumes already doubling over the last decade.
In June, cargo.one and IBS Software announced their strategic partnership to empower airlines on their digital transformation to emerge stronger from the Covid-19 crisis.
The industry is also mobilising a rapid response to global distribution requirements for Covid-19 vaccines, which are highly temperature-sensitive and necessitate logistics on a scale never witnessed before: providing a single dose of the Covid-19 vaccine to 7.8 billion people worldwide would fill 8,000 B747 cargo aircraft. Against this backdrop, national lockdowns and restrictions on international travel have already dramatically reduced the global air cargo capacity from pre-Covid-19 levels by more than 24 percent compared to 2019, resulting in the biggest global air cargo capacity crunch on record.
cargo.one is especially focused on growth opportunities in North America, where airlines have been responding to surging demand for air cargo (Cargo Tonne Kilometers (CTK) are up 8.6 percent YoY) and benefiting from a solid performance of Asia - North America trade lanes.
Founded three years ago by managing directors Oliver T. Neumann and Moritz Claussen alongside chief technology officer Mike Rotgers, cargo.one is building the global operating system for air cargo. Today, the company’s digital platform processes annualised volumes in Europe of more than 110,000 shipments and 45,000 tonnes with 15 airline partners including Lufthansa Cargo, Finnair Cargo, Etihad Cargo and All Nippon Airways Cargo. The intuitive digital platform makes booking cargo shipments as simple as booking a flight on Kayak or Skyscanner. It also enables airlines to distribute their cargo capacity efficiently and reach a broader audience while streamlining processes and saving substantial costs.
“The results are outstanding,” added Michael Droesch, vice president at Bessemer Venture Partners. “cargo.one provides a fundamentally better way for freight forwarders and airlines to book freight, leading to rapidly growing adoption and bookings across the industry. The company has had a fast and successful start in Europe, and we are excited to support their expansion into North America, which represents a large and attractive market for cargo.one’s differentiated platform.”
In such a volatile market situation, and despite relying more heavily on air cargo to support their bottom line, airlines are struggling to distribute their capacity effectively, resulting in freight forwarders being unable to access vital cargo space. The current long and cumbersome manual process of booking and selling cargo further adds to inefficiencies.
In June, cargo.one launched a new product category Passive Temp Control to all freight forwarders in Europe. This product extension enables freight forwarders to compare quotes and book passively cooled shipments like pharmaceuticals in four different temperature ranges.
2020 has been a challenging year for the air cargo industry with increased demand for efficiencies and cost savings from all parties. This demand is reflected in cargo.one’s growth. “Between 2019 and 2020, we increased our user base by 300 percent with 2,000 freight-forwarding offices now using the platform in Europe to book real-time offers in the highly precarious market situation - in that time bookings have grown by more than 700 percent,” commented Claussen. “To date, cargo.one has distributed more than 18 million offers to freight forwarders, serving 347 destinations around the world, and has delivered shipments to 122 countries."
Furthermore, the company will continue to develop tools that use data to let airlines offer more dynamic pricing, engage in better route planning and predict demand in volatile markets as well as adding more products for booking through 2021.
“Soon every freight forwarder in the world will be able to access cargo.one and benefit from the advantages of digital booking. We will use the funds raised to build on our success in Europe, onboard more airline partners, grow our user base of freight forwarders globally, and deepen the expansion into North America and Asia,” commented Neumann. “And, as global distribution of the vitally important Covid-19 vaccine ramps up, we are expanding our product offerings to make all pharma shipments bookable across our partner airlines as the first multi-airline platform to ever do so.”