Rose Rocket, whose platform helps transportation companies communicate, raises $38M
In 2015, Justin Sky, Justin Bailie and Alexander Luksidadi — all veterans of the trucking and logistics industry — came to the realization that, in order to reach a stage of real-time collaboration, the entire trucking industry needed to come online. Shippers, carriers and brokers — the intermediaries between carriers and shippers — had to adopt a common system of record, the trio believed.
They said they couldn’t find such a system, so they created their own. Rose Rocket, a software-as-a-service transportation management system (TMS), is aimed at helping trucking and logistics companies manage their business.
“The key issues facing the industry are capacity, visibility, supply chain disruptions and labor shortages — and the antiquated systems and applications that enable these problems to only get worse,” Sky, Rose Rocket’s CEO, told TechCrunch in an email interview. “Like the way customer relationship management became table stakes technology in the past decades, the TMS is a system of truth for transportation companies, and the industry is rapidly adopting our software to modernize their business operations.”
Indeed, Rose Rocket appears to have gained some measure of traction, with a customer base ranging between 1,000 and 1,500 clients. Sky believes the company’s annual recurring revenue will reach $100 million within the next three years, should the trajectory hold.
“While many industries slowed down during the pandemic, Rose Rocket saw significant growth — and has every year to date,” Sky said. “Since 2021, Rose Rocket’s network has grown 47x.”
So how’s Rose Rocket standing out in the crowded TMS space? It comes down to the feature set, Sky asserts.
For example, Rose Rocket’s platform lets truckers, brokers, carriers, shippers and drivers communicate and collaborate on one platform — unlike some TMS products on the market. It also supports a range of workflows for different segments, from small broker segments to segments for enterprise carriers (think fleets of thousands of trucks). And Rose Rocket can integrate apps that customers need to run their business, minimizing duplicate data entry and allowing for real-time updates.
“Rose Rocket built a product-led growth methodology to ensure that every user can self onboard onto the tool, allowing for companies to minimize business continuity risks when the industry continues to face a shift in talent and management,” Sky said.
It appears to be a winning strategy.
Today, Canada-based Rose Rocket announced that it closed a $38 million Series B funding round led by Scale Venture Partners with participation from Addition Capital, Shine Capital, Scale-Up Ventures, FundersClub and Y Combinator. It brings the company’s total raised to $69 million and will be used to bolster the company’s expansion into larger fleets as well as support investments in product development and network collaboration efforts, Sky says.
“Trucking is an economically strong and stable sector,” he added. “Rose Rocket has always been capital efficient, so we were in a very strong position prior to this round of funding. The Series B is further validation.”
Certainly, Rose Rocket is in a enviable — and profitable — software segment. As far back as 2018, TMS was gaining steam as the benefits of digitization came into sharper focus for the $800 billion-per-year-in-revenue transportation industry. A survey conducted by InMotion Global five years ago found that 91% of trucking companies operating 20 trucks or more were using TMS.
The pandemic, if anything, increased demand. According to Straits Research, the TMS market will grow to reach $19.1 billion in 2030, up from $6.92 billion in 2021.
Rose Rocket, whose platform helps transportation companies communicate, raises $38M by Kyle Wiggers originally published on TechCrunch
