News

SGX leads US$44.4m funding round for online freight platform

The Business Times by WONG KAI YI

Singapore

THE Singapore Exchange (SGX) has closed a US$44.4 million, Series C funding round for Freightos, described as the world's largest online marketplace for freight rates.

SGX, which operates the local bourse, was joined by existing Freightos investors including General Electric Ventures (which led the previous Series B round), ICV, Aleph, and others.

The firm has raised US$94.4 million to date.

"Together with Freightos, SGX will explore the development of financial instruments to introduce the transparency, agility and risk mitigation that other industries already enjoy, beginning with enhancements to the FBX container freight index shifting to daily reporting," Freightos said in a press statement on Monday.

The Freightos global rate database drives the Freightos Baltic Index (FBX), in collaboration with the Baltic Exchange which is part of the SGX group.

Since its mid-2016 launch, Freightos' marketplace has expanded from price comparison to instant booking, online shipment management, tracking, and communication, the company said.

Its aim is transform the "old-fashioned" international shipping industry into one whose rates and capacity are as transparent as those for passenger air travel, said Zvi Schreiber, Freightos' founder and chief executive, by leveraging multiple data points and a network of over 1,200 logistics providers.

The trillion-dollar shipping industry, despite being the lifeblood for many countries, still relies on manual methods for getting price quotes, making it opaque and slow, Mr Schreiber said, adding that getting quotes for a shipment can take "two or three days" even for a major route like China to the US.

The overall mission for the 170-strong Freightos is to "be like an Expedia or Ctrip" for freight, Mr Schreiber told The Business Times in a phone call.

"What happens in shipping today is the prices are changing every day, but nobody can see what the prices are in a reliable way. And sometimes people are paying 30-40 per cent too much," he said.

"In the end, that gets passed on to the consumer. The product on the shelf in the store becomes too expensive because people are overpaying for the shipping service."

Surprisingly, the market for platforms like Hong Kong-based Freightos is "not at all crowded", Mr Schreiber said, due in part to the fact that creating such a service is hard work as there are no data standards in the freight industry. The firm spent four years developing its algorithm before launching its marketplace.

"The meteoric growth of the Freightos marketplace and the success of our platform for freight rate management and digital sales shows that importers and exporters are looking for radically better freight services, while carriers and forwarders are eager to deliver by leveraging technology," Mr Schreiber added.

Michael Syn, head of derivatives at SGX, said: "Freightos is at the forefront of a new wave of solutions for price discovery and digital marketplaces in global freight - an industry at the heart of the global economy. SGX is excited by the potential to develop risk management tools and services and build on Singapore's unique position in the trade ecosystem, to bridge the physical and financial markets."

SGX's counter dipped 0.68 per cent, or five Singapore cents, to end at S$7.27 on Monday before the announcement was made.