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Global Logistics Focus Sept.19, 2016

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6A THE JOURNAL OF COMMERCE www.joc.com SEPTEMBER 19.2016 SPECIAL REPORT THE JOURNAL OF COMMERCE 2016 GLOBAL LOGISTICS FOCUS ventures "have to validate their model and get it right very quickly," Lance Healy, co-founder and former president of Banyan Technology and now the com- pany's chief innovation offi cer, told The Journal of Commerce. "If you don't get (the value proposition) right very quickly and run out of cash, there's not enough time to change your structure and try it again, because the well runs dry too fast. There have been a lot of good ideas that failed in the market" for that reason. It's also diffi cult to push potentially disruptive supply chain technology in a soft freight market, when truck capacity is readily available and shipping rates are comparatively low. That could be a problem faced by Cargomatic, one of the early entrants in the "Uber for Trucking" market. Car- gomatic, founded in 2013, is targeting a specifi c niche: the local truck shipment moving within a 150-mile radius in major urban markets such as Los Angeles. The company offers a technology platform that connects shippers with trucking companies that have unused capacity. The company has raised $10.6 mil- lion, according to Crunchbase, most recently $8 million in January 2015. But Cargomatic hit speed bumps in 2016, lay- ing off a substantial number of staffers and shedding some executives as well, including a chief financial officer and chief operating offi cer. Hrach Simonian, a general partner at Canaan Partners, a Cargomatic inves- tor, and a member of the fi rm's board of directors, told The Wall Street Journal that "there will absolutely be a new cash infusion in the company," after DC Velocity reported Cargomatic was low on cash. Executives at Cargomatic weren't available for comment. There's certainly plenty of cash out there. TransFix, another company offer- ing a smart-phone-based brokerage for truckload carriers, drivers and ship- pers, raised $22 million in July from New Enterprise Associates, on top of $35.8 million raised since 2013. Trucker Path, which has grown from a mobile app that helps truck drivers fi nd parking spots and other facilities into a full-blown marketplace, got a $20 mil- lion boost in June from Wicklow Capital and RenRen, a Chinese fi rm that earlier invested $1.5 million in the company. But the largest investment in the logistics space by far in recent months went to JDA Software, a retail supply chain technology provider. Blackstone and New Market Capital recapitalized the Arizona-based software company in August with a $570 million equity invest- ment. "This investment will accelerate the development of our SaaS-based solu- tions and allow us to develop innovative new solutions on Google Cloud Platform while enhancing our current large R&D investment in our existing products," the company said in an Aug. 19 statement. Entrepreneurs and executives in the logistics technology fi eld increasingly distance themselves from the "Uber for Trucking" label, noting the taxi market that Uber disrupted is very dif- ferent from the U.S. freight brokerage or trucking market, which has much more variety and complexity. "I think 'Uber of Trucking' is a bad idea, and won't catch on as people envision," Barry Conlon, co- founder and CEO of Overhaul, an online marketplace for shippers of high-value freight. "You have this horizontal Uber model and people want to fi t it into a ver- tical trucking market." "While we're having this conversa- tion, 10 companies have opened up that claim to be the next Uber of freight," said Bobby Harris, founder and CEO "If you don't get (the value proposition) right very quickly and run out of cash, there's not enough time to change your structure and try it again."

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