JD.com’s logistics business raises $2.5B from Hillhouse, Sequoia China and others

JD.com, the Chinese e-commerce giant that is Alibaba’s closest rival, is raising giving its logistics spin-out business a huge boost after it announced that the unit is raising $2.5 billion.

JD Logistics, which became a standalone business last April, is raising the investment capital from a range of backers who include Hillhouse Capital, Sequoia China, China Merchants Group, Tencent, China Life, China Development Bank Capital FOF, China Structural Reform Fund and ICBC International, according to a press release announced today.

JD.com confirmed it will remain the majority shareholder with a stake of 81.4 percent. The transaction, which is JD Logistics’ first outside funding event, gives the division a valuation of around $13.5 billion.

It may sound unconventional to spin out division into standalone businesses, but it is fairly common among China’s top tech firms. JD.com itself span out its financial services arm and that business raised just over $1 billion last year. Indeed, Sequoia China participated in funding for both JD.com spin-outs.

Alibaba itself operates a range of affiliates, including $60 billion valued Ant Financial — which it is in process of acquiring one-third of — and a logistics unit called Cainaio.

Cainiao was formed by a consortium of existing logistics players to give the project a running start with resources and customer bases. Alibaba itself took a 48 percent stake, and Cainaio later raised undisclosed funding at a reported valuation of $7.7 billion.

JD.com operates seven fulfillment centers and 405 warehouses in China. It has long prioritized logistics, more so than perhaps even Alibaba.

The company’s network includes fresh produce which requires an efficient network for transportation and management. Elsewhere, it has tested drone delivery and it plans to invest more heavily in logistics automation, including automated warehouses and drone deliveries.

That’s set to continue after this infusion of capital, JD.com CEO and Chairman Richard Liu explained.

“Our decision early on to build out our own logistics network has paved the way for JD Logistics to become the industry leader it is today. The shift throughout global e-commerce towards our model is vindication of the path we chose. This current funding round sets the stage for us to further invest in expanding our lead in the sector in areas like automation, drones and robotics,” he said in a statement.

There may also be synergies in Southeast Asia, where JD.com has made a range of investments including deals in Thailand, Indonesia and Vietnam.

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Fleet raises $10M Series A to make international logistics speedier and more transparent

Fleet, a startup focused on making international logistics less onerous for small companies, announced that it has raised a Series A of $10 million. The round was led by Lufthansa Cargo, the German airline’s air cargo subsidiary, with participation from new and returning investors Hunt Technology, UPS, UP2398 and 1517 Fund.

The Portland-based company’s last funding announcement was in April 2016, for a $4 million seed round led by Hunt Technology Ventures. Its Series A brings Fleet’s total raised so far to $14 million. Founder and chief executive officer Max Lock tells TechCrunch that the capital will be used to launch Fleet GDS, which he says will be the “industry’s first global distribution system that links rates, automates bookings and documentation for shippers and logistics providers on a single, seamless platform.” The company also plans to launch an air freight platform next month, with Lufthansa Cargo as one of its partners and service providers.

Lufthansa Cargo’s chief commercial officer Alexis von Hoensbroech has also joined Fleet’s board of directors. In a press statement, Lufthansa Cargo CEO Peter Gerber said “Fleet Logistics is a perfect match for us as the company combines innovative and visionary thinking with a strong intrinsic motivation to improve air cargo booking and shipping efficiency and, finally, our customers’ overall experience. We expect substantial learnings with regard to our product and service portfolio. Thus, we are sure that Lufthansa Cargo and Fleet will mutually benefit from sharing concepts and ideas.”

Then called Shipstr, Fleet launched at Disrupt San Francisco in 2014, where it made it to Startup Battlefield’s final round. Lock first encountered the logistics nightmares many small import-export businesses deal with while running Schoolboy Ice Cream, which sold frozen desserts to Whole Foods and other distributors. When other food businesses began asking him to import paper cups from Chinese manufacturers, Lock discovered that the cost of booking freight forwarders, who in turn need to book third-party services like warehouses, custom brokers and trucking firms, quickly adds up, and that there is very little transparency in the process.

Fleet was originally created to connect small businesses with freight brokers for international cargo shipments, but it changed its name and business model and launched a marketplace in July 2015 that allows businesses to compare freight forwarders (the agents that arrange the warehousing and shipping of international cargo), manage shipments and leave reviews. There are now more than 500 freight forwarders on Fleet’s platform. The company claims that it can help businesses that make about five to 100 shipments per year save up to $30,000 and 800 hours annually by reducing the amount of time it takes to get quotes from service providers, set up and manage accounts and track shipments across the world.

The startup is building Fleet GDS because the logistics industry “is lacking a technical infrastructure,” Lock says. He explains that many companies along the supply chain have their own proprietary software and use EDI (electronic data interchange) to send information back and forth, a cumbersome, time-consuming process Fleet GDS is meant to fix. Since airlines, warehouses and trucking firms are unlikely to stop using their existing systems, that means the logistics industry needs to solve its own communication problem. Fleet GDS wants to accomplish this by linking major services like rates, capacity, bookings and documentation across every step of the logistics supply chain, including warehouses, trucks, airlines, ocean carriers and customs brokers.

Lock says that Fleet GDS will allow Fleet to continue differentiating from other startups using tech to solve logistics challenges (such as Freightos, Flexport and Haven) because it enables importers, exporters and freight forwarders to communicate directly with the service providers that are currently handling their cargo. In addition to making the process more efficient, Lock believes that it will also increase trust and transparency in the traditionally opaque logistics supply chain.

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Tradeshift Frontiers innovation lab hopes to drive blockchain adoption in the global supply chain

Tradeshift, a procure-to-pay supply chain management platform for SMBs and enterprise, announced Tradeshift Frontiers, an innovation lab and incubator that will focus on transforming supply chains through emerging technologies, such as distributed ledgers, artificial intelligence and the internet of things.

“The use cases we’re working through Frontiers cover a very wide variety of themes, including supply chain financing, asset liquidity, and supply chain transparency,” said Gert Sylvest, co-founder and GM of Tradeshift Frontiers. “There is so much more potential than just cryptocurrencies.”

In the supply chain, as on Tradeshift’s commerce platform, every interaction is based on questions of trust and transparency, which require strong business and governance models.  

One of the best use cases for blockchain is supply chain innovation. Initial applications include Everledger’s blockchain application for the diamond supply-chain to determine provenance, and the Estonia e-residency program powered by decentralized identity management. Blockchain’s shared ledger offers traceability and transparency — the features underpinning the business transactions and trading relationships that comprise our global supply chain.

Tradeshift’s quick ascent from a small Danish startup to a massive player in the global supply chain over the last 8 years, on track to process $500B USD in transaction value this year, could provide both a network adoption effect for technologies like blockchain across the global supply chain and valuable data at scale to transform supply chains.

According to Tradeshift’s CEO, Christian Lanng, Tradeshift already powers 150 out of the 500 fortune 500 company supply chains. “The trade volume across Tradeshift’s platform is greater than the combined trade volume for Ethereum and Bitcoin combined over the last year, and that’s a huge portion of global GDP that can be made available for developers in the form of open-source data,” said Lanng.

There are hundreds of accelerators, labs, and venture studios attached to major corporations, but Frontiers wants to set itself apart through an open-source ethos. Through providing developers with access to their aggregate open-source data, the ability to build third party applications on their platform, and sponsorship for published research, Frontiers can build the ecosystem around supply chain to ultimately benefit the industry and its position within the space.

The accelerator arm will include investments from Tradeshift and their ecosystem partners, joint ventures, and licensing models.

Tradeshift is already sponsoring their first PhD in machine learning at Copenhagen Technical University. Initial research indicates that Tradeshift’s data-set may even improve parallel decision-making, a current weakness of machine learning.

Of course, Laang sees Frontiers and the open-source ethos as good business. “By giving our partners access to emerging third party tech and industry research, we create the next generation technology alignment that creates more loyalty and alignment with our brand.”

Tradeshift’s business model departs from their main competitor SAP in their data-transparency, and ability to build upon their platform. In the supply-chain innovation space, current blockchain logistics pilots by companies like IBM or Mercer are closed.

Overall, Frontiers is allowing developers to have access to open-source data with trade volume credibility, and the ability to develop third-party apps on their platform could be transformative for the global supply chain’s conscience and its bottom-line.

Analyzing aggregate trade data allows businesses to see where data is being valued and produce greater economic benefit in the supply chain. For example, there is a strong corporate interest in resource management as pressure is placed on carbon outputs and in-demand resources like lithium-ion rise in cost.

A developer could use blockchain to build an app based on this data to extrapolate anyone’s carbon usage pressuring companies to opt in and report their own to strengthen their brand. Aggregate data could also be used to help companies identify where they are using more resources than necessary, and manage and track them more effectively.

Last October, Tradeshift joined Hyperledger as a governing member, the Linux foundation’s open-source blockchain development initiative aimed to drive the development and adoption of blockchains across industry.

Tradeshift’s alignment with decentralization and open-source development dates back to founders relationships prior to founding Tradeshift. In 2005, they built Easy Trade, the world’s first open-souce, peer-to-peer trade platform, where they established some of the world’s first standards for digital trade.

“It’s our DNA and good business karma to make things open-source, so they come back to you,” said Lanng. “We don’t want the next generation of ideas to happen in a vacuum, because the whole industry benefits if the whole industry is lifted.”

“With Frontiers, we aim to bring the transformative potential of these technologies into the hands of every company in the network, no matter their size or role in the supply chain,” Sylvest said. “That also means unlocking greater value for small businesses and their trading partners to bring them on equal footing with the companies that dominate the digital supply chains today.”  

Tradeshift, which launched as an e-invoicing platform in 2010, is now the world’s largest business commerce platform connecting 1.5 million companies across 190 countries, and transacting across 28 millions SKUs. The platform offers solutions for procure to pay, supplier engagement and financial services, and the ability to customize commercial apps on its business commerce platform. To date, Tradeshift has raised $182 million in venture financing, most recently in a $75 million series D round in June 2016 led by Data Collective.

Frontiers could drive increased adoption of AI, ML, and blockchain across global supply chains, and increase industry innovation, while positioning Tradeshift an increasingly dominant industry leader in global commerce.

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Natural home products startup Grove Collaborative bets niche wins over the Amazonization of everything

Who needs Amazon when you can make your own online distribution channel? At least, that’s the idea behind Grove Collaborative, a natural home care products company that ships natural cleaning brands like Method and Mrs. Meyer’s.

Co-founder Stuart Landesberg started the company in 2014 after working with retail brands during his time as an investor at TPG. He noticed how limited shelf space was for brands in brick-and-mortar stores and the idea came to him to launch a tech company that could help move products by prompting consumers to buy at the ideal time. The company pivoted to online retail products in 2016 and rebranded itself as Grove Collaborative.

But consumers have a lot of choices in this space and the brands offered through Grove could just as easily get to your door through same-day shipping on Amazon.

As unlikely as it seems a customer would turn to Grove when there’s the convenience of Target or Amazon, Landesberg tells TechCrunch the company has raked in “tens of millions of dollars” in revenue and that it has “hundreds of thousands” of active customers. He also says more than half of Grove’s customers have never shopped natural before.

Still, he admits there’s no special sauce here. The company is not trying to compete with lower prices and it offers similar prompts as Amazon to re-up supply when you’re likely to be out. But he says the difference is incumbents often prioritize profit over customers and environmental health.

Those numbers also look promising and VC’s have been eager to support Grove on its journey. The startup just pulled in $35 million in Series C funding led by Norwest Venture Partners. The funding comes right on the heels of a $15 million Series B, which quietly closed last March and was led by Mayfield VC.

The primary use of the funding will go toward marketing, which Landesberg told TechCrunch is mostly through influencers such as health bloggers and Youtube personalities with a following in the space.

The startup will also use some of that money to build out new offerings from the main Grove brand, which include items such as hand sanitizer, essential oils, moisturizers and natural sponges.

“Families want to make safe, sustainable, informed choices, and that’s how e-commerce can catalyze real progress,” Landesberg said. “This funding allows us to bring natural products to more homes, and help us build a brand that can serve our community unconstrained by the realities of offline sales.”

Mapbox adds makes another acquisition to bolster its navigation toolkits

Mapbox, the Softbank-backed developer of mapping applications that competes with Google Maps TomTom and Here, has acquired the intellectual property and developers behind MapZen’s Valhalla project in a bid to strengthen its navigation toolkits.

The acquisition, made as Mapzen was winding down, brings the Valhalla development team in-house for a bargain price that Mapbox chief executive Eric Gunderson declined to disclose.

“It’s one of those classic things where having a long-term relationship you become close to people and when shit starts going a little sideways, there’s an opportunity,” Gunderson told me of the acquisition.

Through the work both companies had been doing on the Valhalla open source project, Mapbox’s developers had been collaborating with the team behind the project for over a year.

Mapping is a critical component of any autonomous technology for self-driving cars, and powers a wide array of advertising services and features on mobile devices.

Late last year, Mapbox raised around $146 million from Softbank to become a credible competitor to Google Maps and Here in autonomous driving and in new arenas like augmented reality. Already companies like Snap, Mastercard, Instacart, and Airbnb use the Mapbox SDK for their applications.

The access to those users gives Mapbox anonymized telemetry data from an aggregated 200 million users.

Echoing a statement Gunderson made last year when the company bought another emerging mapping technology company, Mapdata, he said that the company has 900,000 developers using its SDK in various products, and all of that location data is being fed back to Mapbox to strengthen its mapping tools.

Unlike other routing services that pre-compute directions based on information acquired from every road in a given area. The Vahalla toolkit means that routing decisions can be made in real-time — improving efficiency for companies that desperately need it.

Delivery services, logistics companies, and ride-hailing services see better mapping and routing as a revenue generator. The faster a driver can reach a destination the faster they’re able to pick up a new fare or make another delivery, which reduces the need for more drivers on the road and increases profits for companies.

“The world is live updating and that means you need to have a constant sensor network out there,” says Gunderson. And unlike Waze and Google Maps which own the underlying data associated with any use of their tools, Mapbox lets the app developers who use its service keep the data about their customers. All Mapbox wants is the anonymized location.

“We get anonymous latitude and longitude data back and then stitch that back into the network… using the sensor network, but the sensor network is your phone,” says Gunderson. He said that through the SDK, Mapbox actually has more sensors on the road than almost any other company (Google Maps is till the monster here, through the data they collect with Android).

Mapzen’s Valhalla development team

“This is going to immediately have benefits for some of our OEM auto customers,” Gunderson said. “Turn by tun directions with real time traffic data and a more lightweight footprint (for the application),” are all benefits that OEM’s will enjoy, he said. “The data transfer is very light to devices and it’s also super customizable. It will allow the routing network to build more customizable data experiences.”

The startup that facilitates deliveries for HelloFresh in SF and LA raises $4.3 million

AxleHire, a last-mile logistics startup that facilitates deliveries for companies like HelloFresh, Freshly, Sunbasket, La Boulangerie and others, has raised $4.3 million from Acorn Pacific, RGA Ventures and others.

AxleHire, which started back in 2015, is doing over 150,000 shipments per month and bringing in $750,000 in monthly revenues. By April, AxleHire expects to hit $1.5 million in revenues, AxleHire co-founder and CEO Daniel Sokolovsky told me via email.

AxleHire currently operates in San Francisco and Los Angeles. It’s gearing up to launch in to new markets within the first quarter of 2018 and an additional five in the second half of next year, Sokolovsky said. The markets AxleHire has its eyes on include Portland, Seattle, Denver, Las Vegas, Reno, Boise and Phoenix. While AxleHire works with larger companies shipping over 10,000 items a month, AxleHire also works with smaller companies.

“More and more, we have seen retailers and CPG companies reach out about doing direct-to-consumer shipping because we’ve been very successful with it,” Sokolovsky said. “We have recently (last week) started delivering products to Trader Joe’s as well.”

In the case of HelloFresh, AxleHire’s subcontracted carriers pick up the packages on a big rig truck and then takes them to the AxleHire facility. Then, AxleHire sorts them before the drivers come to pick them up for delivery.

“The main difference between these (sorting facilities) and warehouses is that they are meant to hold inventory for less than 24 hours,” Sokolovsky said. “Most of our inventory is out in 12.”

Competitors in this space include OnTrac, GSO, and delivery giants FedEx and UPS. In the last few months, AxleHire has been piloting with a robot delivery company.

“We have successfully integrated a method to use any type of delivery robot within our system,” Sokolovsky said. “We are also launching our own delivery locker system to combat Amazon’s, for use by any carrier and by any business.”

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UPS bets on blockchain as the future of the trillion-dollar shipping industry

The world is run by trade. Freight and logistics in the U.S. alone account for nearly $1.5 trillion annually (2015 data). As the world’s economies scale up, that number is only expected to increase as we become more dependent on the international supply chain for our goods and services.

The industry, however, is not prepared for growth, as it currently sits on top of a crumbling infrastructure prone to systematic inefficiencies and rampant fraud. Countless intermediaries rake in fees and drive up the price of shipping. The problem is that the complexity and opaqueness of the process make it difficult to put checks and balances in place.

The FBI estimates that cargo theft causes an annual loss of approximately $30 billion per year (U.S.), with an average theft value of $190,000. In effect, cargo theft can cost consumers up to 20 percent more for their goods. And though most of the problem areas have been well-documented for decades, the distributed nature of ownership has instilled little accountability in any of the industry’s stakeholders.

However, disruption is coming to the industry in the form of blockchain technology, which promises to deliver a cheaper and more efficient system of managing logistics. Innovative startups, as well as major incumbent parties, are investing enormous amounts of time and resources in blockchain development.

Most recently, UPS announced they were going to join the Blockchain in Trucking Alliance (BiTA), a forum for the development of blockchain technology standards and education for the freight industry. The alliance hopes to spur standards development for the shipping industry as a whole by implementing a secure blockchain system.

Why now? Why is UPS, along with 300-plus other major companies, betting on blockchain?

The answer: They want to be a part of the revolution. They want to play an instrumental role in developing the smart logistics network of the future. And they recognize that if they don’t get their foot in the door, someone else will.

The future of logistics and freighting will be heavily dependent on blockchain.


The main appeal of blockchain technology lies in its ability to create decentralized and immutable ledgers — networks that have no single point of failure, are maintained by multiple parties and whose information cannot be hacked or corrupted. This increases the security and transparency of all information that is stored on a blockchain across the life cycle of a transaction.

The freight and logistics industry incorporates a large number of brokers and significant amounts of hidden information across complex supply chains. No single party can access all aspects of the chain. Currently, the freight and logistics industry is heavily controlled by freight brokers, which exist to facilitate transactions of loads from shippers to carriers. Brokers seek out loads, tag on a markup, then sell it to carriers. This not only increases costs for carriers, it also leads to increases in downstream prices that directly affect consumers.

The lack of efficiency, transparency and security across the global networks is precisely the problem blockchain technology is designed to solve. Blockchain, if adequately leveraged, will give customers the opportunity to participate in a freer, more transparent global trade, and potentially limit the need for brokers and lower intermediary costs.

For those reasons, Linda Weakland, UPS’s Director of Enterprise Architecture and Innovation, is long on blockchain. She says, “It has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage. The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders.”

One effective way transparency and efficiency can be increased is by leveraging smart contracts, the core innovation behind the Ethereum blockchain. Smart contracts are essentially self-executing contracts that are fulfilled when predefined stipulations are met. This is particularly useful when it comes to increasing the efficiency of shipping escrow by removing or limiting the intermediaries involved, and therefore bypassing the markups they post.

Blockchain also can increase the tracking and transparency of the supply chain. Shippers can gain more visibility across their supply chain and communicate important information such as loads, geo-waypoints and basic compliance information with carriers.

Once a shipment is confirmed and recorded on the blockchain, it is immutable, meaning no party can dispute the validity of the transaction or fraudulently manipulate the records. Once transactions are logged, smart contracts can then release any payments in escrow instantaneously, limiting the time and costs associated with intermediary processing.

Given the nascent nature of blockchain technology, corporations and consortia around the globe are starting to invest in and partner with startups that are building proofs of concept in order to test solutions prior to commercialization. One example of a startup working on this is ShipChain, which aims to apply blockchain technology to the logistics space.

The company, which is part of BiTA, is building a fully integrated supply chain management system that gives insight into each stage of the logistics process. In addition, the company aims to create a decentralized brokerage system — essentially an open marketplace for shippers and carriers. Leveraging the transparency of information on the blockchain, the marketplace will let shippers optimize cost and time for every shipment.

In other words, shippers can track the capacity, cost and estimated delivery times for different routes for a given shipment before making a decision on the marketplace. At the same time, carriers can continually post information about their capacity for shipping vehicles and lanes, thereby dynamically adjusting the fairest pricing based on supply and demand. The transparency and efficiency afforded by the blockchain benefits all parties by allocating resources in the most effective way without artificial markups by rent-seeking brokers.

The lack of efficiency, transparency and security across the global networks is precisely the problem blockchain technology is designed to solve.

This increase in visibility throughout the process will dramatically decrease the theft and hacking that plagues the industry. Inherent to blockchain technology is the ability to create a decentralized, encrypted ledger that logs all of the critical transport data. This log is immutable to hackers, as no one has the ability to change or delete crucial information.

While the premise of blockchain is promising for an industry rife with inefficiency, the technology is still very much in its early days. As of now, a shipment from East Africa to Europe could require approvals from as many as 30 different parties. By the time it reaches its destination, up to 200 different interactions might have had occurred.

Many of these interactions happen not just between shippers and carriers, but also between regulators, retailers, wholesalers and even customers. For a global shipping blockchain network to function effectively, participation is needed from all stakeholders.

The future of logistics and freighting will be heavily dependent on blockchain. Even though shippers around the globe have existing means of tracking shipping containers, and detractors of blockchain may argue that completely revamping tracking for the freighting industry will be too massive an undertaking, industry leaders are already recognizing the potential of using blockchain to track supply chains.

Maersk Line, the world’s largest container-shipping company, has already teamed up with IBM to apply blockchain to track its cargo shipments in order to reduce the mountains of paperwork associated with each shipment.

Shippers and carriers are optimistic that advances in blockchain technology will support the industry’s growth for years to come.

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