How SaaS startup FourKites went on to raise $101.5M in 6 years by helping brands track and manage freight
Driven by the idea of redefining supply chain management, Mathew Joseph, who has nearly a decade’s experience in the logistics space, used his knowledge and expertise to launch FourKites, an enterprise SaaS platform, in 2014.
The Chicago-based startup combines machine learning with real-time data to help clients lower operating costs and improve on-time performance.
“In 2014, we felt we were at the right place, at the right time. The global logistics sector faced a lot of pressure from Amazon and its real-time delivery. Every company wanted to have that form of real-time visibility for its logistics," says Mathew.
The startup claims it is helping some of its clients like Pepsi, Nestle, and Cargill gain visibility on where their products are at any given point of time. FourKites is an enterprise SaaS software that plugs into GPS Telematics systems, Enterprise Resource Planning (ERP), and dispatch systems. At present it covers all modes including ocean, rail, parcel and over-the-road.
In 2019, FourKites raised a total of $50 million in Series C round of funding, taking the total fund raise to $101.5 million. It claims to be having clients which have 23 multi-billion-dollar worth of business.
After obtaining his engineering degree from College of Engineering in Guindy, Chennai, Mathew went to the US and completed his master’s in industrial engineering in 2003. He then worked on logistics technology at JDA and Oracle Corp, before signing up to do an MBA in 2012 from Kellogg School of Management graduate
However, the idea to startup was born at Kellogg in 2013. And Mathew’s idea got more validation when he managed to raise $1.25 million from some angel investors who believed in the product.
At the seed stage, Mathew says, he focused on building a good team with good executives to take the idea forward. By 2017, the team had achieved a product-market fit with enterprises which saw value in real-time logistics.
“The product-market fit has to be fast. I realised that enterprise CEOs wanted to know value off the bat. They wanted to know if a startup can scale with them. So, I nailed down the business model and the enterprise SaaS model, and corporations signed us up fast because they wanted to reach retail shelves on time,” says Mathew.
Mathew says, data is the key, and AI and machine learning come later. Hence, he focused on the basics of business, which is to ensure customers turn profitable with the technology, and not see it as a cost centre.
The business of FourKites
The product combines machine learning with data networks of big brands, and helps them take control of their supply chain through real-time visibility and data-driven insights.
FourKites also claims it is giving the world’s leading shippers, carriers, and 3PLs an end-to-end, real-time predictive visibility. This delivers increased utilisation, automation, and cost-saving across the entire supply chain. All these are available as intelligent dashboards (graphs and tables) for clients. The company's business model is an enterprise SaaS model where the startup sells annual licenses to corporate.
“Think about the millions saved. There is zero inventory by delivering products on time and there is no stock out in retail for the customers we serve. This is what we call supply chain transformation. This is how B2B brands were able to work with retail just like how Amazon works with its consumers. In my day job, before I became a retailer, brands would share their story of how they needed a real-time solution but had disparate systems that did not offer any purpose," says Mathew.
According to Gartner, the SaaS business is clocking $151 billion at present, and will go up to $250 billion by 2025. Zoho and Freshworks are some of the large businesses operating in the space in India.
The company is currently seeing competition from Kinaxis, Elementum, and One Network Enterprises.
In the next 18 months, FourKites wants to double its customer base. With a 500-member team at present, the startup plans to add another 100 employees soon, says Mathew.
The company is also hiring for specialised skills and senior level positions – primarily front loading the technical leadership to expand the capacity in the near future.
“Our goal is to be the premier visibility platform for global shippers and expand to other areas of supply chain,” says Mathew.
According to PwC, B2B industries are striving for efficiency and transparency. Manufacturing industries are facing far greater expectations around efficiency and performance than ever before. Their customers expect faster time to market, reduced defect rates, and customised products.
The advent of the industrial Internet of Things and what other research refers to as ‘Industry 4.0’ is allowing manufacturing companies to redefine everything from the way they interact with customers to how they structure supply chains. FourKites wants to focus on just this to change the way a modern supply chain works in the digital era.
(Edited by Javed Gaihlot and Megha Reddy)