Our Investment in SmartHop

By Nate Vasel, Principal, and Esteban Reyes, Founding Partner at Las Olas VC (a.k.a. LOVC)

SmartHop automates the route planning and dispatching decision-making process for truckers on the road. Its machine-learning-enabled system modernizes the traditional dispatching model, which is largely a manual and cumbersome process.

SmartHop uses APIs and scraping from broker marketplaces, historical information, real-time loads, and organizes the U.S. into sixty plus market clusters to make predictions and run scenarios on suggested routings (suggesting which loads which trucks get), with semi-automatic decision-making (trucker retains the ability to input preferences and overrides). Ultimately, the company’s mission is to eliminate $40Bn in waste by pairing empty spaces from truckers on the road who want to make more money with shippers who want to reduce transportation costs.

We’re honored to join Guillermo Garcia, Miguel A. Sucre, and Joaquin Brillembourg on their journey.

SmartHop’s Opportunity

The American Trucker Association says we’ll need 898,000 more drivers over the next decade to keep up with growth and demand. And 90% of truckers are small and independent owner-operators, the trucking business is low margin (<8% EBITDA), so precision and capacity utilization is imperative. There is approximately 20% waste in full-truckload shipping (FTL), estimated to be a $200Bn market. Because there is more demand for truckers than available supply, truckers have bargaining power with carriers — they can choose the work they like, vs. taking what is available. Truckers want to make more money, and shippers want to reduce cost. Most truckers don’t have resources or time to optimally plan their work; it’s done manually with suboptimal results. Most shippers/brokers don’t engage with truckers beyond each transaction, so they have limited/stale data on truckers (e.g., location, availability, preferences, etc.). Large logistics companies like FedEx are looking for ways to engage independent truckers; these companies have no means now to do so effectively. SmartHop is becoming the trusted platform for truckers by providing them with free tools that help make their job easier (i.e. planning, dispatch, demand management, etc.). As SmartHop is successful engaging with the majority of truckers, it aggregates valuable data about their preferences, available capacity, location, etc, that can be utilized to provide them with “best” recommendations. Shippers and brokers will want to use SmartHop to access available supply and optimize cost by reducing waste (i.e. $40Bn) in a system where load matchmaking is made more efficient. As SmartHop builds a larger trucker network/dataset faster than any new entrant, it keeps ahead with its algorithmic accuracy, and enables customers with superior optimization of their supply-chain logistics operations.

What’s Next for SmartHop?

The team is heads-down focused on building product and assuring successful outcomes — early-adopter customers are top priority. With this financing they’ll expand engineering, sales, and customer success capabilities. We’re super excited to be working closely with SmartHop!

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We invest in smart people who’re building the future in non-obvious places.

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