project44 announces $10.5 million in Series A funding

With the objectives of expanding into new transportation modes and growing its product’s data intelligence and analytics capabilities, Chicago-based project44, a technology services provider offering standardized, secure Web service API (application programming interfaces) integrations enabling 3PLs and shippers to connect with carriers in real time, said today it has closed a $10.5 million Series A investment of growth capital.

The company said this financing was led by Silicon Valley-based Emergence Capital and Chicago Ventures, with Silicon Valley Bank also participating.

The company has established itself as a major player in the less-than-truckload (LTL) sector. Going back to 2014, it has “maintained critical mass” in the $37 billion LTL market, with 99.9 percent of LTL carriers connected into their platform, which it said provides a level of real-time connectivity and proactive transportation management that in turn reduces the need for manual back and forth communications while saving time and money for all parties involved.

In March, it introduced a volume LTL (less-than-truckload) rating API, which facilitates real-time volume rate exchange between carriers and their shipper, broker, and 3PL customers. And in June the company announced it had integrated more than 1,000 transportation APIs into its platformed network.

Through the investment announced today, coupled with its LTL proof of concept in place, project44 said it plans to branch out into other transportation modes, incuding, truckload, final, mile, and intermodal, as well as address additional data intelligence and analytics opportunities for the global supply chain.

In an interview with LM, Jett McCandless, project44 CEO and Co-Founder, said that while it has had LTL mastered for some time, it has been ultra-focused on on-boarding its customers and making sure they are happy, while building out multi-mode systems behind the scenes.

“Our platform was designed three years ago, and we have always had the ability to handle any mode,” he explained. “It is really about working with the leading-edge companies in the truckload, final mile, airfreight, and intermodal spaces and add that for our clients. We have already been working in some of those modes, we just have not had deep penetration for them in the past. We are now officially getting into these other modes.”

While each mode has its unique set of challenges, nuances, and obstacles, McCandless said that it is fortunate that when project44 initially set up its platform it knew it wanted to get into other modes.

“The logic is there in the platform’s design,” he said. “I think a lot of folks that would like to be considered as competitors are built for a specific mode, so when they try to go into a multimode approach, they are probably going to have to re-platform the entire company. For us, the product remains the same, but the endpoints change for each mode and that allows us to be fast and nimble and makes sure the customer experience is great.”

Project44 was initially “bootstrapped,” or self-funded, by McCandless, and could have kept going in that direction, as it had growth and proof of concept, he said, adding its customer additions are growing every month, too.

But he stated that he knew if project44 could partner with the right companies, with his top choices being Emergence Capital and Chicago Ventures, it would create an opportunity to take project44 to another level.

“We had an all-cash offer to sell the company last year for 8 figures, and we turned it down,” he said. “It was a decent offer, but we ended up going out and doing some fundraising and making pitches and ultimately set our eyes on the prize of both Emergence and Chicago Ventures. Fortunately we were ‘over subscribed,’ with lots of VCs that wanted to offer us money on our terms. Chicago Ventures is the best VC in Chicago and has some of the wealthiest Chicago families as lending partners, and Emergence Capital having a who’s who of Silicon Valley success stories like Salesforce and Box, specializing in enterprise SaaS and being pretty well known as the best SaaS VC in the world. It was whom we wanted.” 

As for the next steps for project44 regarding this round of funding on the global supply chain side for data intelligence and analytics capabilities, McCandless said that on the supply chain side it tends to apply to the retailers and their suppliers.

“Things like retailers’ must arrive by dates are getting trickier and trickier for suppliers to hit, with fines increasing and [delivery] windows getting smaller,” he noted. “And the retailers are pushing these demands for a lot of good reasons like the cost of carrying inventory, dealing with stock outs, being more nimble, and change with trends in the marketplace but unfortunately without using APIs there is not a connectivity and the additional ways and costs suppliers have are way offset by the benefits. If you go deeper into the supply chain, you are seeing EDI is created at the PO (purchase order) creation, EDI 50. We can replace that EDI with an API and replace it with an API advance shipping notice. And we can also replace transportation EDIs with APIs. The reason retailers are working with their suppliers to replace EDIs is the massive benefits of seeing this new world that is much more dynamic and offers a more transparent relationship that is much more beneficial for both parties. Ultimately, the consumer has a better product that they are interested in at a lower price and that’s who wins.”