- Todorov Todorov and Kevin Vaz’s start-up Frontline Dynamics is working on a product to optimize air cargo operations.
- The start-up is based in San Francisco, and the development is done by the Bulgarian partner Sciant, who is also a co-investor with the venture capital fund BrightCap Ventures.
- The strategic market of Frontline Dynamics is in the US, but the company does not rule out the possibility of global expansion.
In the course of just one day, more than 100,000 airplanes take off into the sky. About half of them carry goods and, in 2017, the air cargo industry moved around 657 million consignment items. The data, which is sourced from the International Air Transport Association (IATA), also indicates that the industry forecast shows that volumes will continue to grow in the years to come.
Unlike passenger air transport, where the ticket is already digitally managed, each cargo shipment container requires around 30 paper documents. The standard for these documents and processes was set up nearly 70 years ago, and has not changed since. The filling and handling of all this paper often creates administrative delays and obstacles as shipments pass through different service points. “It is cumbersome, slow and lacking traceability,” says Todor Todorov, co-founder of Frontline Dynamics, whose goal is to “digitize processes and optimize operations. “
Todorov and his partner Kevin Vaz have personally encountered these challenges and realize the real cost it adds to the process due to their deep industry experience. Vaz has worked for 22 years in the cargo transport sector, including large companies such as Lufthansa Cargo. He met Todorov 16 years ago in New York, where they worked together.
The idea of creating a solution that will simplify the processes and increase the efficiency of air freight services developed over the course of several years. Conversations to develop a particular technology product began a year ago, and, in early 2019 in San Francisco, they founded the Frontline Dynamics. The software development is being handled in Bulgaria by Sciant, a technology company that is a co-investor in Frontline Dynamics, along with the venture capital fund BrightCap Ventures.
The two co-founders are based in the United States. They deal with product design, marketing and sales. “Product design is done in the US because it will be our first market. Our first users are there and it is better to be close to them,” explains Vaz. “Our slogan is ‘Designed in San Francisco, developed in Sofia’,” Todorov adds.
The team from Sciant consists of 7 technologists. They are engaged in developing the user interface, the server system behind it, and technical implementation of the product requirements. “Sciant 2.0 (the former Sciant company was acquired by VMware in 2007) is a software company with a focus on providing IT services, but we decided to expand our business and work more with startups, creating Sciant Labs,” says Sciant CEO, Evlogi Georgiev. “Sciant Labs is a co-investor and co-founder of several startup companies. We are working with Frontline Dynamics as both a service provider and as an investment partner of BrightCap Ventures. Consider us as the CTO in the startup. We guide the technology selection, the system architecture, and the management of the technical teams, “said Sciant CEO Evlogi Georgiev.
The third party in this business collaboration is the venture capital fund BrightCap Ventures, which has supported the start-up company with 200,000€. “Frontline Dynamics is still making its baby steps, and we believe that with the right support, it will grow into a major player in the market, says BrightCap Ventures co-founder Georgi Mitov. “The investment is in the form of a convertible loan — a loan that becomes part of the company’s capital.”
The fund supports start-up companies with a technology profile and has a resource of € 25 million, of which € 20 million comes from the European Investment Fund (EIF) and € 5 million attracted by private investors. Georgi Mitov himself is behind two successful startups. One of them develops software solutions to improve aviation efficiency, and was acquired by the American giant Honeywell. Mitov quickly identified the significance of the problems that Todorov and Vaz want to solve, and the fund sees a strong management team with industry expertise in the two co-founders of Frontline Dynamics.
“We recognize Frontline Dynamics as a company that addresses the global market but is also committed to developing the technology in Bulgaria. We have an interest in caring for the Sofia ecosystem, and it is very important for us that the companies we invest in to have a local presence,” explains Mitov.
A universal tool for air cargo
The vision for Frontline Dynamics is to create a platform to serve as a universal tool for the entire freight lifecycle, not just for the needs of the airline, ground operator or location infrastructure. This means that the documentation for each shipment is located in one place in the cloud that is visible to all interested parties within the supply chain. In air freight, this chain is long and complex. From the point of origin, there is the merchant, who sends the goods, the forwarder, the land operator and then the air carrier. The same chain is repeated on the delivery side until the point of receipt of the shipment at its final destination. Along the way, the process is complicated by numerous safety and customs inspections.
Frontline Dynamics wants to simplify the work of the participants in the process by automating a large amount of transactions and enabling electronic payments between them.
“Our goal is to have greater transparency and traceability from beginning to end, and at each point of service of the items, so that the shipment passes through each stage without the need for the hand transfer of paper documents,” Todorov explains.
The system that Frontline Dynamics develops will be able to store the air waybill (AWB — the dossier of each shipment) for an extended period of time. At present, the regulatory requirements for this are seven years. Expectations are that the digitization of the process will significantly reduce the costs of all parties in the process. The platform will also be able to calculate the cost of shipping the shipment and offer an online payment option. It will also be a marketplace that connects players in transportation and logistics to offer their services to each other.
In the near term, the target customers are air cargo carriers. In the future, however, the system will be adapted to other modes of transport, as the processes and problems there are identical, although the documentation requirements are different.
The current stage of the platform is at MVP level which stands for Minimum Viable Product — a prototype version of the product that allows the team to gather as much information from their users about how they use the product with the least amount of investment.
“We promote the product in the industry, but we cannot yet offer it for sale as it is still in development. We already have two customers running trials on the prototype, and there is significant interest — many potential users say they want to use it, “says Todorov.
In September, two early adopters will begin testing the platform at seven U.S. airports, including Cincinnati, New York, Los Angeles, Chicago and Atlanta.
Source: Capital Weekly. View original article — https://www.capital.bg/biznes/predpriemach/2019/07/12/3937400_digitalno_dosie_za_aviopratki/