TruckSmarter

According to a 2022 study, if the US trucking industry were to come to a halt, grocery stores would start running out of essential goods like bread and milk within 72 hours. Despite the freight transport sector forming the backbone of the US logistics industry, which was valued at $1.4 trillion as of April 2024, it still lags in terms of technology adoption. A November 2023 survey of 250 logistics leaders, for example, found that many were planning to ramp up their investment in technology and implement technology in advanced use cases.

Amid these broader industry challenges, owner-operators — independent drivers who operate their truck-driving businesses — face unique hurdles, highlighting the need for targeted solutions. As of December 2024, there were over 716.7K owner-operators employed in the US — accounting for a little over 20% of the total truck drivers in the US. Despite their impact on the economy, many owner-operators rely on outdated technology and inefficient processes. In 2023, a survey of 300 owner-operators found that 56% planned to change how they operate to survive. One of these primary challenges for owner-operators was simply finding jobs.

TruckSmarter offers owner-operators a comprehensive platform that addresses both operational and financial challenges. The platform enables owner-operators to discover and book jobs through freight brokers, access nationwide load boards, and take advantage of integrated financial services, such as factoring, banking, and fuel discounts. These tools help drivers maintain cash flow and reduce operational costs, intended to alleviate common financial pressures faced by owner-operators.

Daniel Kao (CEO) and Paolo Bernasconi (CTO) co-founded TruckSmarter in 2021.

After graduating from NYU in 2014, Kao secured an investment banking job offer but turned it down after realizing, through running a small technology business while at NYU, the transformative impact of building a company and “using technology to make different pieces of different people’s lives just a little bit better.” He therefore began his career in business development at Square, drawn by its impact on the outdated payment industry. Then he joined DoorDash as a “launcher” in 2014, describing the role as “like launching a new business every four weeks,” because his job was to launch DoorDash in new cities.

During his DoorDash interview, Kao shared his plan to spend three years learning before starting his own company — and he did just that. He returned to Silicon Valley to launch Sharespace in 2017, a startup enabling people to rent out extra home space for storage. Within two years, companies like Uber Freight and Stripe were interested in acquiring Sharespace.

Although Stripe was the ultimate acquirer for an unknown amount in 2019, Kao’s exposure to logistics from Sharespace coupled with his conversations with Uber Freight sparked an interest in freight, leading him to see the potential for innovation and digitization in the industry. As a result, he joined Uber Freight as the general manager of the shipping platform in 2019 and helped grow the business for two years. While there, he engaged directly with truck drivers, uncovering a few key challenges that they faced daily.

The biggest challenge Kao identified was faced by owner-operators. Owner-operators are solopreneurs in that they have the freedom to choose their loads, decide whether to lease or buy a truck, decide when and where they want to drive, manage their operations, and find their jobs of loads to carry and deliver. At Uber Freight, Kao noticed that owner-operators were spending multiple hours a day focused on finding jobs instead of driving. They were messaging brokers, using an average of 50 apps, sending emails, and making calls just to secure a job for the day.

Meanwhile, Bernasconi graduated from Middlebury College in 2015 with a degree in computer science and worked for Plaid as a software engineer and product manager from 2015 to 2021, before starting TruckSmarter with Kao. As of December 2024, the company operates out of offices in San Francisco and Chicago, with a team of around 60 employees.

TruckSmarter is a platform designed to enable truck drivers and owner-operators to streamline their operations. It provides access to a comprehensive load board, enabling drivers to find the best-paying driving jobs without hidden fees. The platform also offers fuel discounts and financial tools, including quick payment options, to help truckers maximize earnings and manage their businesses more efficiently.

Load Board

Source: TruckSmarter

A load board is a digital matching service that connects shippers and drivers. Shippers list the available freight they need to be delivered along with key details, while drivers can browse the board to find suitable loads to transport. This system helps shippers efficiently move their goods while enabling drivers to maximize their truck capacity and earn income.

TruckSmarter’s load board is free to use and combines all load boards across the US into one platform. It offers drivers unlimited free searches for freight, access to freight broker data, in-app bidding, load comparisons, backhaul recommendations, and a simple booking feature. This eliminates the need to hop from app to app to find and book loads. TruckSmarter says it has 100K daily loads available on its board as of December 2024.

As new loads are posted around the country, they appear in real-time on TruckSmarter for drivers to see. The platform also includes added filters such as trailer type, location, rate, and broker, enabling drivers to quickly identify the most profitable loads for them. If they see a load that suits them but isn’t ready to book, they can add it to their “saved loads” so it’s saved for when they’re ready to book. Drivers can also receive alerts for new loads that match their preferences.

Source: TruckSmarter

Shippers sometimes hire freight brokers, logistics experts that arrange freight transportation services for businesses that need to ship goods, to help connect them with drivers and handle all shipping details so that shippers can focus on their core operation. Typically, when a driver starts working with a new freight broker, the broker will require a carrier packet which is a collection of documents and agreements verifying credentials, ensuring compliance, mitigating risk, and ultimately building a relationship between the driver and shipper for future loads. TruckSmarter helps drivers complete their carrier packets so they can start working with new brokers sooner. TruckSmarter also partners with trusted freight brokers who go through credit checks, ensuring that drivers know they’re working with trustworthy partners.

Backhaul, transporting freight on the return journey to the origin point at a reduced rate, is another area where TruckSmarter provides value by offering backhaul route recommendations to owner-operators. By optimizing these routes, TruckSmarter helps drivers maximize their revenue potential and reduce empty miles, improving both operational efficiency and profitability.

Load board for brokers: Freight brokers can also post freight loads for free on TruckSmarter. TruckSmarter has the ability to adapt to the broker’s workflow processes to seamlessly integrate their freight load postings on the TruckSmarter platform. When brokers make updates to their transportation management system, which is a logistics software platform that helps businesses and freight brokers plan and execute the physical movement of goods, they will automatically update the TruckSmarter board. Additionally, brokers can collaborate with TruckSmarter to develop their API to gain access, control, and visibility over their load postings at no cost. Essentially, brokers can post, update, and manage their loads with TruckSmarter’s help for free.

Source: TruckSmarter

Factoring

Another issue owner-operators face is that they often have to wait at least one month after delivery to get paid. That’s why TruckSmarter introduced freight factoring. Factoring is when a business sells its accounts receivables to a third party to meet its short-term liquidity needs. Drivers can sell their accounts receivables (invoices) to TruckSmarter and receive their money within two hours instead of waiting for one month for the broker to pay them. In return, TruckSmarter charges drivers a rate between 2.5% to 3% based on their invoice volume. If their invoice volume increases in the future, TruckSmarter will work with the driver to lower that rate. Additionally, TruckSmarter works with trusted brokers, however in case a broker goes bankrupt before paying a driver, TruckSmarter will take the loss and insure the driver.

Drivers can take a photo of their rate confirmation (the agreed payment amount from the broker) and proof of delivery documents, then upload them to their TruckSmarter account. From there, TruckSmarter handles the generation and management of the driver’s invoices. Once the documents are approved, TruckSmarter deposits the payment directly into the driver’s TruckSmarter checking account, which is FDIC-insured. Additionally, through a partnership with Thread Bank, funds in the TruckSmarter checking account are insured for up to $3 million, providing drivers with enhanced financial security.

Fuel Discounts

Source: TruckSmarter

TruckSmarter partnered with over 750 truck stops around the US to offer discounts on fuel for drives and owner-operators using their service. Unlike traditional fuel cards, drivers can simply pay for fuel through the TruckSmarter app. While any payment method can be used, drivers who pay through their TruckSmarter checking account can save up to an additional 20 cents per gallon on top of the listed price. For example, if an average semi-truck fills up 120 gallons of fuel twice a week, the driver could save $132 per week if they use TruckSmarter.

Source: TruckSmarter

The mobile app notifies drivers of truck stops within TruckSmarter’s network of partnerships, making it easier to find participating locations. Drivers can also search for a specific location on the map to get directions to a specific truck stop. When they decide which stop to re-fuel at, there is visibility on fuel prices and how much they can save by using the app. Users are given a six-digit fuel code that they can show the cashier to claim the discount. They also have a referral program where drivers can invite one another into TruckSmarter’s fuel network to help them save on fuel as well.

Banking

Source: TruckSmarter

TruckSmarter’s banking feature allows drivers and owner-operators to manage their finances with TruckSmarter. When customers factor with TruckSmarter, they receive a TruckSmarter Visa debit card. The TruckSmarter checking account is linked directly to the debit card and is available for use as any other normal debit card. There are no setup or maintenance fees associated with the card and money can be transferred in and out of the TruckSmarter checking account within three days at no cost. The card can be added to drivers’ phones through Apple, Google, or Samsung Pay for easy access. Free ATM withdrawals are also available.

Customer

TruckSmarter's primary customers are owner-operators, as they are responsible for finding their jobs through load boards. In an industry that has hundreds of apps for freight sourcing, TruckSmarter’s load board is intended to simplify the process by eliminating the need for switching between apps, messaging people, and other time-consuming methods, making it easier for owner-operators to find freight. In 2024, 21% of owner-operators reported having difficulty finding loads to haul.

TruckSmarter also serves brokers and truck stops. Brokers have the opportunity to list, update, and manage their loads through the platform. Truck stops have the opportunity to partner with TruckSmarter to provide fuel discounts for their community of drivers while attracting drivers from the community for their business as well. In 2024, 77% of owner-operators booked shorter routes due to rising costs like fuel which is why TruckSmarter developed the fuel-saving feature.

Market Size

Freight demand has remained steady in 2024, with the ACT Freight Composite Index (a measure that tracks freight activity across various transportation modes) projected to increase by 3.2% by the end of 2024. However, freight growth has slowed due to reduced consumer spending, inventory adjustments, and ongoing overcapacity issues. Although truckload spot rates (a one-time fee paid to move a shipment based on market conditions) have improved somewhat since the third quarter of 2024, challenges in rebalancing capacity have constrained substantial rate increases in the year's final quarter.

In 2022, the US trucking market was valued at $217.3 billion and is projected to grow at a CAGR of 3% through 2027. Of the 3.6 million truck drivers in the US as of September 2024, about 716.7K were owner-operators. Despite being less than a quarter of the driver population, owner-operators hauled 70% of the nation's freight as of August 2022. Additionally, more than 75% of drivers used factoring to get paid instantly as of May 2024. Factoring helps drivers have access to immediate cash and a more predictable cash flow. Without factoring, they don’t know when they’ll get paid for their job.

Uber Freight: Uber Freight, a subsidiary of Uber, is a logistics platform that connects shippers with drivers to simplify and streamline the logistics process. Founded in 2017, Uber Freight allows drivers to book loads 24/7. It also recommends loads to drivers and allows them to place bids on loads. Similar to TruckSmarter, its no-fee Uber Freight carrier card gives drivers access to discounted fuel prices and factoring with same-day payout. Uber Freight partnered with BasicBlock to offer a factoring fee of 2.5% of the invoice value. Uber Freight raised $500 million from Greenbriar Equity Group in 2020 and an additional $550 million from Abu Dhabi Growth Fund, D1 Capital, and GCM Grosvenor in 2021.

CloudTrucks: CloudTrucks is a management company for trucking businesses and owner-operators. Similar to TruckSmarter, CloudTrucks offers the technology to build a better schedule of loads from multiple sources. It also has a CloudTrucks Cash Card and provides factoring services as well. Additionally, it has a software product for fleets. It’s an end-to-end solution to help manage a trucking company’s fleets. While it serves owner-operators, there is an emphasis on trucking businesses and fleets as well. CloudTrucks was founded in 2019. Since then, it has raised $141.6 million, including $115 million in Series B funding led by Tiger Global in 2021.

SmartHop: SmartHop, founded in 2018, is a “booking a trip” management platform that helps trucking businesses, particularly independent owner-operators, and small fleets, earn more and save time through trusted load recommendations and task automation. Similar to TruckSmarter, drivers can see loads from multiple sources all at once and get recommendations on which loads to transport. SmartHop, however, does not offer any financial services products or services to drivers as of December 2024. The company has raised a total of $46.6 million from investors including Sozo Ventures, Union Square Ventures, RyderVentures, Greycroft, and Equal Ventures as of December 2024.

OTR Solutions: Founded in 2011, OTR Solutions is an end-to-end factoring service company for drivers. It provides financial solutions like banking services and fuel cards. Unlike TruckSmarter, OTR Solutions solely focuses on financial services for drivers whereas TruckSmarter emphasizes load boards in addition to financing. OTR Solutions is backed by Summit Partners for an unknown amount of funding as of December 2024.

TruckSmarter is free to use through its mobile application and desktop or laptop application. Its primary revenue stream comes from its factoring service, where the company earns a 2.5% to 3% fee each time a driver factors an invoice through their platform. This service forms the backbone of TruckSmarter's business model.

Additionally, TruckSmarter may also generate revenue through partnerships with truck stops, encouraging drivers to refuel at partner truck stop locations. When drivers refuel at these stops, TruckSmarter likely earns a commission for directing business, while drivers benefit from fuel discounts. This creates a mutually beneficial arrangement for TruckSmarter, the truck stops, and the drivers.

TruckSmarter has a total of 120K active drivers and owner-operators on its platform as of December 2024. Kao also said the company hasn’t spent any money on sales or marketing, and that the majority of new users join through word of mouth. TruckSmarter has also partnered with several freight brokers including Axle Logistics, GX Logistics, and Trident which helps drivers get more freight leads and build relationships with brokers. They’re also partnered with over 750 truck stops in 48 states which helps reduce fuel prices for drivers.

As of December 2024, TruckSmarter has raised a total of $94 million at an unknown valuation. In July 2024, it announced the closing of a $50 million debt facility, with the option to go up to $100 million if needed, led by Treville Capital Group, a private alternative asset manager focused on credit-oriented investments for private companies.

In September 2022, TruckSmarter raised a $25 million Series B round led by Thrive Capital with participation from co-investors including Bain Capital, FJ Labs, Founders Fund, a16z, and Fin Capital. Angel investors from earlier rounds also included Tony Xu (co-founder of DoorDash), Eric Glyman (co-founder of Ramp*), Ryan Petersen (founder of Flexport), and Jett McCandless and Jason Duboe (co-founders of project44).

Building a Larger Platform

Kao emphasized that while TruckSmarter has made significant progress, the company recognizes that there is still a way to go in addressing the diverse and evolving challenges faced by truck drivers and owner-operators. TruckSmarter’s milestones, such as streamlining the load discovery and payment processes, mark important steps forward, but Kao sees these achievements as just the foundation for a broader vision. In 2023, he highlighted the importance of continuing to deliver exceptional customer service as a cornerstone of the company’s strategy, enabling deeper engagement with drivers and a clearer understanding of their unmet needs.

Kao also hinted at plans to expand TruckSmarter’s product offerings to solve a wider range of issues that drivers encounter daily. This includes exploring more innovative payment solutions that go beyond factoring. Such solutions could involve integrating real-time payment systems, flexible financing options, or tools that help drivers better manage cash flow and reduce financial stress. By focusing on these approaches, TruckSmarter aims to empower drivers to take greater control of their businesses and improve their financial well-being.

Owner-Operator Business Management

TruckSmarter focuses on the discovery and payment experience for owner-operators. However, in May 2023 Kao observed that many owner-operators operate their business with a pen and paper, indicating a potential opportunity for TruckSmarter to rally around. Unlike competitors who cater broadly to the trucking ecosystem, TruckSmarter focuses exclusively on creating a platform tailored to the unique needs of owner-operators. This strategic focus positions the company to address critical business management challenges for owner-operators by providing digitized tools for operations, payments, and overall efficiency.

Competitive Landscape

TruckSmarter faces competition from companies that offer load recommendations, financial services, and fuel discount programs for drivers. As competitors digitize facets of the trucking industry, they have the potential to add products and features similar to those of TruckSmarter. For example, Uber Freight offers similar services that TruckSmarter offers like factoring and a comprehensive load board, however, TruckSmarter focuses heavily on serving owner-operators while Uber Freight focuses on all truck drivers. TruckSmarter distinguishes itself by focusing on one core mission: helping owner-operators secure jobs and earn money. Its goal is to become the one-stop shop for owner-operators, providing a suite of free services designed to help maximize their potential.

Shifting Labor Market for Truck Drivers

The US is facing a truck driver shortage, with 78K unfilled truck driver positions as of July 2024. This high demand for drivers might suggest that they have an easier time finding jobs and getting paid faster, potentially reducing the demand for services like TruckSmarter. Furthermore, as companies like Tesla are developing electric and self-driving trucks, that may reduce the demand for the future of owner-operators and TruckSmarter's business along with a shift in the entire industry. A quarter of the largest long-distance trucks are predicted to be powered by batteries by 2032. This could virtually take away one-fourth of TruckSmarter's customers from using their fuel-saving product in the future.

TruckSmarter aims to improve the logistics industry by helping owner-operators find their own loads through digitization and transparency. The platform addresses the industry’s fragmentation by reducing the need for drivers to switch between multiple apps, helping them find jobs, get paid faster, and save on operational costs, ultimately making their work more efficient. Although TruckSmarter’s competitive edge lies in its dedicated focus on owner-operators and the comprehensive range of services it offers, the ongoing challenge will be to innovate and refine its products to stay ahead in an increasingly competitive market.

**Contrary is an investor in Ramp through one or more affiliates.