If you are a founder and launched a startup last February of 2020, just before the pandemic hit, then you may have felt like you were living the ultimate business nightmare. But if your company serves to stabilize the supply-chain business, then, in fact, you may have hit the ground running at just the right time. So is the story of Miami-based startup SmartHop. This AI-powered app helps interstate truckers make their routes more efficient and lucrative while removing a lot of the administrative hassle for drivers.
SmartHop announced today that it raised $12 million in a Series A round, bringing the company’s total funding to date to $16.5 million. The round was led by Union Square Ventures, whose past investments include Stripe, Twitter, Coinbase, Etsy, MeetUp, SkillShare, and Duolingo.
SmartHop takes a complex problem with lots of moving parts and offers a simple solution. To understand the gap in the market, you need to understand the hurdles that interstate truck drivers face. And since Garcia is a former truck driver himself (he was a pet food delivery driver while in college in his native Venezuela and scaled his business to a 500-person trucking company), he has a good grasp on the pain points and intricacies of the industry. I lived with my parents in Caracas, and I asked my parents to empty their garage, and that was my first distribution center,” said Guillermo Garcia, CEO, and co-founder of SmartHop, of his experience, starting his first trucking company. “The trucking market moves like the stock market,” he added, explaining that it’s ever-changing and therefore impossible to predict.
According to a 2019 study by The American Trucking Associations, the trucking industry is a $791.7 billion industry, representing 80.4% of the nation’s freight bill. Additionally, 91% of trucking companies are small businesses, meaning they have six trucks or fewer. Many are owner-operators. Traditionally, to get loads, truckers had to scour apps or websites of about 15,000 different brokers. It was a total uncoordinated, inefficient, free-for-all approach that left drivers unable to predict their monthly revenues, among many other things.
This is how SmartHop helps those drivers. Let’s say Bob lives in Atlanta, and he has a single truck; he’s an owner-operator. He has a load that will take him to Seattle, and it’s going to take him several days to get there. Financially, it doesn’t make much sense for Bob to start the trip without knowing what else he can pick up along the way or if Seattle should be his turnaround point. Maybe there’s not a lot of freight leaving Seattle these days, but a lot is going out of Chicago. There’s no way for Bob to know these things.
Before SmartHop, Bob had to pick up the phone, call brokers and make deals. Most of this work was done while on the road, and Bob had no foresight into his next couple of weeks of work – or life, for that matter.
With SmartHop, Bob can enter details about his truck’s capacity, cities he doesn’t like driving through, and other information. SmartHop will recommend loads to him that optimize his profits and travel time. Think of it like when you’re going and using Waze and it asks if you want to drive to Starbucks because it’s a couple of minutes out of the way. All you have to do is accept, and Waze does the rest. SmartHop operates similarly.