On Wednesday, air cargo disruptor SmartKargo–the cloud-based freight-tech logistics startup that functions like an “AirBnB for air cargo” [our analogy–ed.]–announced that it has received a strategic investment from Boston venture capital firm M33 Growth. The dollar amount of the investment was not disclosed.
M33’s investment in SmartKargo comes as the company, founded in 2006, seeks to capture market share in e-commerce deliveries, as online sales accelerate from an estimated $5 trillion sales globally in 2021 to a projected $6.4 trillion by 2024. SmartKargo–which is headquartered in Cambridge, Massachusetts, with strategic operations in India, the Philippines, Brazil and Canada–has since positioned itself as the world’s only service provider offering comprehensive end-to-end eCommerce shipping solution for airlines, enabling global air carriers to access new revenue streams by providing cargo hold space for e-commerce shipping and package delivery to the door.
A SmartKargo study from 2017 estimated 35 percent of all global trade being moved through air cargo (this well before the massive acceleration of e-commerce due to covid-19), but noted that antiquated management systems and processes, a fragmented and bureaucratic value chain, poor reliability, heavy regulatory and paperwork burdens, and lack of flexibility and responsiveness had prevented air carriers from fully tapping into the cargo market’s potential. The company noted that as of 2017, 70 percent of the usable belly space of so-called “combination carriers” (i.e., passenger and cargo plans) flew empty and close to one in six shipments missed the promised delivery time.
“Today, the movement of data associated with every shipment is becoming as important as the movement of goods,” SmartKargo’s study concluded.
According to the company, airlines in Brazil, Canada, Mexico and Norway have been among the early adopters, and have significantly grown cargo revenues by shipping e-commerce products on passenger airplanes.
“The proven success of SmartKargo as a leader and innovator in the air cargo technology sector comes at a time when airlines are looking for new revenues and retailers are seeking speedy solutions for the delivery of their products,” said Brian Shortsleeve, Co-Founder and Managing Director of M33 Growth, who is now on the board of SmartKargo. “The investment from M33 Growth underscores our confidence that SmartKargo is well positioned to grow while continuing to innovate and provide excellent customer service.”
SmartKargo’s system is a cloud-based e-commerce platform that can be “wrapped” around legacy air cargo systems, fully integrating e-commerce shipping capabilities into the traditional airline cargo management system within the space of a few months.
“We believe that M33’s investment and knowledge will help us bring our product to more customers worldwide and while continuing to build out our leading capabilities,” said Milind Tavshikar, CEO of SmartKargo. “Our innovation in technology and deep domain experience is creating a tremendous first mover’s advantage for our customers. We are thrilled to be working alongside the highly successful advisors at M33 and look forward to accelerating our growth and completely changing the game for the global air cargo industry.”
M33 Growth specializes in scaling founder-owned, bootstrapped companies. Besides SmartKargo, its current portfolio includes W Energy Software, the Texas and Oklahoma-based cloud computing firm that develops software for upstream and midstream oil and gas companies, along with Leading2Lean, a digital workflow platform for discrete manufacturers. According to its website, M33 Growth has also previously advised Tesla and supply chain visibility platform project44.
“We see phenomenal opportunity in our partnership with Milind and his team, not only because of their deep experience in the airline cargo industry, but also because of their continued drive to innovate and identify opportunities that we believe can increase profits for their customers,” Shortsleeve said. “SmartKargo is a classic case study on constructive innovation that we believe will be transformational for airlines and e-commerce in years to come.”