Turvo

Rethinking how the world moves things

Location:
Sunnyvale, California

CEO:
Eric Gilmore

Website:
turvo.com

Why Logistics?

As part of our analysis of commerce infrastructure, Activant began to explore the logistics market as part of a deep dive around understanding the failure points that keep companies from truly becoming omni-channel businesses as we define it - having goods where and how your customers want them. For companies the obvious point of failure was knowing not where their inventory is - they could not fulfill their goods to the end customer in a timely fashion without better visibility. We became enamored with understanding inventory levels at all nodes of a supply chain, from the point of manufacture, to port, to warehouse, and eventually, to points of consumption (stores). In speaking to our industry ecosystem, it became apparent that even the best run organizations only knew where ~40% of their goods were at any given time. We needed to figure out how to see goods at the item level in transition, ie. on trucks. The logistics market is one of the largest markets in the world. According to JP Morgan research, the global logistics market is estimated to be valued at over $900 billion this year, growing to over $1 trillion by 2020. Yet many portions of the value-chain, such as trucking, remain highly fragmented, lack visibility, and are very inefficient. This represented an ideal market for technology to drive efficiency gains and thus garner adoption.

mountains and road

Given the Abundance of Logistics Startups, why Turvo?

When we first started to evaluate the logistics software market in 2014, we were impressed by the work being done around creating digital freight brokers who were offering digitally enhanced brokerage services. Digital freight brokers filled an immediate need for smaller shippers (people who need their goods shipped) as they were mostly ignored by brokers when they could not fill an entire truck – they fit into the LTL (less than load) sector which was run inefficiently. Further there was a “tight freight” market, meaning for full truck loads, there were more loads being requested than drivers on the road. Brokers who could find “slack” or truckers were gaining a lot of business quickly. Leveraging technology to find trucks or book them more quickly gave those brokers an advantage. While these digital brokers represented an interesting opportunity, we didn’t see them as long-term value creators as many of the macro tailwinds would erode over time, and their ability to arbitrage venture dollars to gain business by undercutting industry margins would evaporate. As we continued to explore the market we found that many large enterprises still rely on legacy transportation management systems (JDA, Oracle, SAP) which are 15+ years old, and are built with increasingly obsolete frameworks. They often do not integrate appropriately with other internal technology systems, nor with the systems of external counterparts without long and expensive EDI implementation. In practice this means that these mostly self-contained systems must be manually reconciled with the real world, requiring millions of labor hours via phone, email and even fax. While these systems organize workflows and data within an enterprise, in the process of doing so they also create redundancies and siloes throughout the broader logistics networks. In short, they do little to resolve, and in some cases actually contribute to, the inefficiencies arising from interdependence.

Turvo CS Body 1

The key insight of Turvo founders Eric, Jeff, and Sai was that in order to significantly improve the efficiency of the global logistics market, an additional technology layer (e.g. location tracking) could not be added on top of existing logistics workflows. Rather, workflows needed to be reshaped and made more collaborative. By empowering stakeholders in the logistics value chain to collaborate on shipments, Turvo works to break down data siloes, incorporating new forms of data collection as they emerge. By aggregating extensive data sets, Turvo provides all parties a more holistic view of the shipment and opens up vast opportunities for efficiency gains. Improvements can come in the form of increased broker productivity, increased average load capacity, faster delivery times, fewer empty loads, quicker and more effective communication between parties, simplified invoicing and payments, and increased visibility throughout the supply chain. Given our conviction in Turvo’s business model, we led Turvo’s Series A round in 2016 and have worked closely with the team across all operational areas.