LetsCargo, a Taiwan-based online logistics startups, has raised US$700,000 in a pre Series A funding led by Global From Day One Fund (GD1), a VC firm dual-headquartered in Taipei and Auckland (New Zealand).
The proceeds will be used towards geographic expansion, especially in China, as well as accelerate acquisition of clients. The startup also plans to further extend its fintech activities, according to an official statement.
LetsCargo was founded in 2015 and was seeded by Xiamen’s leading accelerator AT Work in August last year.
Globally, LetsCargo levels the playing field for forwarders and shippers through technology. The company offers a surface and air freight price search engine that is comparable to Expedia or Ctrip in the online travel sector.
Furthermore, by working with third-party financial institutions, LetsCargo also provides working capital financing to forwarders through its platform.
According to the company, small and medium-sized forwarders and shippers have yet to embrace the digital age and instead, still rely on faxes and phones to map out their optimal delivery routes and times. In contrast, LetsCargo offers a suite of software services that feature vendor quotation, customs clearance management, product inspection, in-land transportation, and real time updates of cargo arrival status.
By providing APIs to logistics-related companies involved in the delivery of a shipment from port to warehouse, LetsCargo aggregates the essential information on a common online platform and allows logistics companies to improve their workflow.
Headquartered in Taipei, the startup also has sales offices in Shanghai, Xiamen, and Shenzhen. Currently it serves over 5,000 clients on its logistics platform.
LetsCargo’s target market includes exporters, freight forwarders, and importers that serve both sides of the global logistics chain.
In addition, LetsCargo has teamed up with local financial organisation Ximu to offer credit to its clients in China. Most forwarders have their working capital locked up with shipping companies to whom they pay a deposit to secure cargo space. LetsCargo currently extends a revolving credit line of RMB 500,000 (US$74,000). Since launching this service in May, LetsCargo has extended more than RMB 10 million (US$1.5 million) of working capital to date.
Eric Chou, Founder and CEO of LetsCargo, said: “The logistics sector has a very low level of IT utilisation. In this case, ‘old school’ isn’t a good thing. If an enterprise needs to dust off their fax machine in order to get a critical update on an incoming shipment, LetsCargo is here to offer a better way.”
Due to expanded free trade agreements and a global boom in e-commerce, the global logistics market is expected to grow at a 7.5 per cent CAGR from 2015 to 2024, from US$8.1 trillion in 2015 to US$15.5 trillion by 2023.
As for its addressable market, millions of companies worldwide need to ship their products through freight forwarding, including over 70,000 forwarders now doing business in China.
Founded in January this year, GD1 is a cross-border technology-focused fund with the majority of capital to be invested in New Zealand and Taiwan startups with a focus on the US and Asian markets. To date, the company has invested in three companies, including Qotient and Spotlight Reporting (both based in New Zealand).
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