The Forager cross-border logistics technology platform has started looking for an exit.
According to sources familiar with the deal, the Chicago-based technology-based freight brokerage has hired an investment banker, seeking a strategic buyer at a valuation of $ 50 million.
While FreightWaves is informed that the company has hundreds of millions of dollars in freight in its market, including a carrier network of 3,000 companies with approximately 110,000 trucks, the company has achieved sales of $ 24 million. dollars with an average single-digit gross margin, highlighting the difficulties of executing cross-border logistics.
FreightWaves reached out to Forager, who declined to comment.
Since 2019, Forager has raised a total of $ 14.5 million. It’s been 16 months since its last capital injection, a $ 10 million Series A funding round that valued the company at $ 32.5 million and was led by US Venture Partners.
In previous funding announcements, the company has indicated that its goals are to expand its SCOUT technology platform, designed to optimize cross-border supply chain operations in the United States, Mexico and Canada.
When launching his latest version of SCOUT in February, co-founder and CEO Matt Silver explained his hopes to create a platform for trucking companies to sell their cross-border capabilities.
“Most trucking companies don’t have sales people. All they can do is call a few brokers and hope they find decent freight. Seeing how carriers can live or die for a few big customers, it has become important for us to give them the tools to grow their businesses, ”said Silver.
In January, Forager also hired Steve Pho, former senior vice president of corporate development and business at RetailMeNot, to become the new chief financial officer and president of the cross-border company.
In an interview with FreightWaves, Pho explained that he would be responsible for allocating capital to integrate SCOUT into a SaaS product to improve the company’s LTV / CAC ratio, the “lifetime value” ratio. of a customer or an operator on customer acquisition costs, increase the profitability of its average customer.
Related: Startup Veteran Steve Pho Joins Forager’s C Suite
By taking a page from the Silicon Valley playbook, Forager hoped to create stronger relationships with customers and operators through value-added services within its SaaS product, fostering product loyalty and long-term use. term.
“Once you get that density or that audience, it opens up a lot of opportunities for you to serve both parties. This is what we are currently studying, and we have a good idea of how we want to go about it. Right now we are trying to get shares – we have to keep growing. Series B capital will be used to continue growing the business, ”Pho said in the interview.
As the Series B rise progressed, the discussion shifted to mergers and acquisitions, the source said, and Forager’s management became convinced that it would take a strategic buyer, another transportation, to understand the value of the market and the technology behind it.
This is a developing story. FreightWaves will update as the situation evolves.
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