Rose Rocket, whose platform helps transportation companies communicate, raises $38 million

In 2015, Justin Sky, Justin Bailie and Alexander Luksidadi, all veterans of the trucking and logistics industry, realized that in order to move to a stage of real-time collaboration , the entire trucking industry needed to connect. According to the trio, shippers, carriers and brokers - the intermediaries between carriers and shippers - needed to adopt a common registration system.

They say they couldn't find such a system. So they created their own, Rose Rocket, a software-as-a-service transportation management system (TMS) to help trucking and logistics companies manage their business.

“The main issues facing the industry are capacity, visibility, supply chain disruptions and labor shortages – and the outdated systems and applications that allow these issues to persist. only get worse,” Sky, CEO of Rose Rocket, told TechCrunch in an email interview. "Like the way customer relationship management has become table stakes technology over the past few decades, TMS is a system of truth for transportation companies, and the industry is rapidly adopting our software to modernize its business operations."

Indeed, Rose Rocket seems to have grown in popularity, with a customer base ranging from 1,000 to 1,500 customers. Sky expects the company's annual recurring revenue to hit $100 million over the next three years, if the trajectory continues.

“While many industries have slowed down during the pandemic, Rose Rocket has seen significant growth – and every year since,” Sky said. "Since 2021, Rose Rocket's network has grown 47 times."

So how does Rose Rocket stand out in the crowded TMS space? It depends on the feature set, Sky claims.

For example, the Rose Rocket platform allows truckers, brokers, carriers, shippers, and drivers to communicate and collaborate on one platform, unlike some TMS products on the market. It also supports a range of workflows for different segments, from small broker segments to corporate carrier segments (think fleets of thousands of trucks). And Rose Rocket can integrate the apps customers need to run their business, minimizing duplicate data entry and enabling real-time updates.

“Rose Rocket has developed a product-driven growth methodology to ensure that every user can fit into the tool, allowing companies to minimize business continuity risks as the industry continues to grow. deal with a shift in talent and management," Sky said.

Seems like a winning strategy.

Today, Canadian company Rose Rocket announced the closing of a $38 million Series B funding round led by Scale Venture Partners with participation from Addition Capital, Shine Capital, Scale-Up Ventures , FundersClub and Y Combinator. This brings the company's total to $69 million and will be used to bolster the company's expansion into larger fleets as well as support investment in product development and network collaboration efforts, Sky said. .

"Trucking is an economically strong and stable industry," he added. “Rose Rocket has always been capital efficient, so we were in a very strong position heading into this round of funding. Series B is an additional validation."

Certainly, Rose Rocket is part of an enviable and profitable software segment. As early as 2018, TMS was gaining momentum as the benefits of digitalization became increasingly evident for the $800 billion-a-year transportation industry. A survey conducted by InMotion Global five years ago found that 91% of trucking companies operating 20 or more trucks used TMS.

The pandemic has rather increased the demand. According to Straits Research, the TMS market will reach $19.1 billion in 2030, from $6.92 billion in 2021.