Consolidation in the World of Technology-Based Shipping Companies: Digital freight company CDL1000 acquires competitor Next Trucking in an equity transaction. This continues the trend of mergers in the struggling, technology-oriented industry that connects trucks and cargo.
The agreement links the business of CDL1000, which manages freight on short routes between seaports and warehouses, with similar services from Next Trucking, focusing on the busiest container port complex in Los Angeles and Long Beach in Southern California.
The details of the agreement have been kept confidential. According to Andrew Sobko, founder and CEO of CDL1000, the acquisition, along with the purchase of Hickory Transportation Services, a Jacksonville, Florida-based freight forwarder focusing on the Southeastern United States, which took place in November 2023, will expand the company's offerings and strengthen its nationwide reach.
"CDL1000 was present in 18 major ports but never had a significant market share in Los Angeles," said Sobko. "Through the acquisition of Next Trucking, we are now among the top three leaders in the L.A. and Long Beach area."
For nearly two years, startups in the freight sector advocating for the simplification of shipping processes have been struggling due to a persistent slump in the logistics industry. Based in Seattle, Convoy, an eight-year-old startup initially supported by Amazon founder Jeff Bezos and Microsoft co-founder Bill Gates, ceased operations last autumn after being valued at $3.8 billion the previous year.
Uber's Freight Division Recorded a $14 Million Loss in the Fourth Quarter of 2023, as Revenue Fell by 17% to $1.28 Billion. Particularly Hard Hit are Venture Capital-Financed Digital Freight Forwarders, as High Interest Rates Constrain New Funding Rounds.
The New York-based company Transfix canceled plans for a 2022 IPO through a merger with a special purpose acquisition company and instead raised a smaller amount of capital through a private financing round.
Next Trucking was founded in 2015 and raised 273 million dollars before its acquisition.
In July 2023, the company was valued at $196 million by Pitchbook Data. In a statement, CDL1000 announced that the transaction was financed by Brookfield Growth and Mucker Capital, former supporters of Next Trucking, as well as others, including SVB Capital.
Nicholas Sammut, Managing Director of Brookfield Growth, said that Brookfield Asset Management's venture division believes that CDL1000 is on track to make further acquisitions "that will drive the digital transformation of established operators and assets."
