Air Cargo Booking Site Gets Bessemer Funds, Plans U.S. Foray
(Bloomberg) -- Cargo.one, which operates an online system for air-freight booking, raised $42 million from investors including Bessemer Venture Partners after the Covid-19 crisis helped to drive new business.
The Berlin-based start-up lets shipping firms such as freight forwarders book air cargo in a way similar to how websites like Skyscanner sell airplane tickets. It plans to use the money -- its second funding round this year -- to expand in the U.S. and Asia, it said Thursday in a statement.
Air-cargo costs have skyrocketed in the past year as the Covid-19 crisis kept planes on the ground, limiting the space available in the holds of passenger jetliners. A surge in online shopping and port congestion has also contributed to the squeeze, leading to a four-fold increase in Cargo.one’s user base and an eight-fold rise in bookings, according to managing director Moritz Claussen.
“Most airlines have a manual system where freight forwarders call around the various booking offices for a quote and then go back to the lowest one to confirm the booking,” Claussen said in an interview. “When the pandemic hit, booking offices were suddenly working from home and the phones went unanswered. And that’s when our business really took off.”
Cargo.one said it has processed about 45,000 tons of cargo in Europe through its 15 airline partners, which include the air-freight units of Deutsche Lufthansa AG, Finnair Oyj, Etihad Airways and All Nippon Airways Co.
The latest funding round also included existing investors Index Ventures, Creandum AB, Point Nine Capital and Next47 GmbH, Cargo.one said in a statement. Altogether, Cargo.one has now raised about $64 million, including seed financing and a July funding round of $18.6 million that also included Lufthansa Cargo.
Air cargo revenue rose 29% in the third quarter for carriers tracked by the International Air Transport Association industry group, as surging prices more than offset the reduction in capacity.
While around 2,000 dedicated freighters carry about half of all goods moved by air, the remainder typically goes in the bellies of the world’s 22,000 regular jetliners. Some airlines have converted passenger aircraft to cargo use.
Some of the new funding will be used to develop tools that use data to let airlines offer dynamic pricing, plan routes better and forecast demand, Cargo.one said in the statement.
The company is also expanding its product offering to allow pharceutical shipments to be booked through its platform, as the Covid-19 vaccination effort begins around the world.
“We see ourselves as the Skyscanner for cargo,” Claussen said.
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