Flock Freight Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Oren Zaslansky. He's the CEO and founder of flockfreight and leads strategy fundraising and executive talent recruitment. He also works closely with sales development, product roadmap, and fulfillment teams. Are building an algorithmically carpool LTL freight SaaS tool. It's a mouthful. The growth is incredible. Orin, you're ready to take us to the top? [00:18] >> I am. Thanks for having me today. [00:20] I don't wanna bury a lead here. So I had you on the show back in December. We did an interview, recorded an interview. We go deep. You teach me about shipping from LA to Chicago, trucks, terminals. I learned a bunch of stuff and you say we're doing about $75,000,000 in run rate. I wanted to feature you in an upcoming issue of the magazine. I pinged you just to confirm the numbers. You said, Nathan, we're at 300 [00:41] run rate now, million. What is going on? How did you get this much growth so quickly? [00:46] >> Well, I think it's fair to say we've achieved product market fit. We're almost six years old. The end of twenty twenty one will be a six year old company and the first four years were excruciating. I cringe sometimes when I meet people today and they meet us today and they think, Oh, this is easy. You guys are killing it. And the reality is like, Well, you should have met us in 2018. So, you know, four years [01:07] >> of building technology, building a business, working on use cases, getting it wrong, getting it right, getting it wrong again, listening to the customer, iterating, iterating, not pivoting, but iterating. You know, a very agile environment until we really understood what they needed. And we figured that out in early twenty nineteen and that was a guarantee of a shared truckload at the point of purchase. For the first three years, were Wait, Corey, [01:31] dive deep into that, dive deep what that means to people not familiar with trucking. [01:35] >> Yeah. So the common way of moving palletized goods, first of all, goods move on pallets in The United States. So you're a manufacturer and you've made tables, chairs, computers, food, kind of everything and anything, they're put on a pallet and they're sent across a very dense hub and spoke. Think eight drivers, eight trucks, eight terminals to go from that LA to Chicago example that we spoke about last time. And that is unfortunately a very low quality. [01:59] >> It doesn't pick up on time, doesn't deliver, it gets damaged, things get lost and stolen, it's expensive and it's slow. These are not the key performance indicators you typically hope for. What we do instead is we algorithmically create carpools or what we now call shared truckloads. So a customer can come to flock and they could say, Hey, have four pallets, I have 12 pallets, I don't really wanna see my goods take forever and get lost and [02:23] >> get destroyed. What is the alternative? And we would say, Well, we're gonna use our technology to create a rideshare, a truck share program for you, one truck, one driver and we'll make sure that truck is full. And so initially for the first three years of the firm, you could imagine if you're building a carpooling model, there's challenges but there's also just what we call liquidity, you need volume. Marketplace. Marketplace, got to line up time and space, [02:49] >> simultaneity. So, you know, it took us three years to get it to the point where it wasn't just aspirational, we'll try to create a shared truckload. The market, our customers told us clearly, if you can guarantee it, then you've got something. If you're just gonna try, that's cool. I mean, we were building a great business. We were raising capital and bringing on customers and retaining them. But the customers told us if you could guarantee that at [03:13] >> a point of purchase, that I wouldn't have to gamble on this, then you would be [03:16] Orin, doing just to clear, these truck drivers, you're trying to sign up to have liquidity to your marketplace. And they're saying, Orin, like, I'm not gonna go through the work of signing up if you can't guarantee my truck's gonna be full. This is why this is important to you, is that right? [03:27] >> Well, there's two components to it. That's the supply side of the marketplace, yes. On the demand side of the marketplace is a manufacturer, is a shipper that says, If you can guarantee my four pallets move hub less, don't see eight trucks, eight drivers, eight terminals. If you can guarantee me that if I do business with flockfreight, they'll move on one truck, one driver and never move through a terminal. That was the big activation moment, the big [03:52] >> moment. So we built that and that meant additional optimization capability, more algorithms but what it really meant was a pricing engine. A pricing engine that could sell you a portion of the truck and predict whether or not we at flock would be able to sell other portions of the truck and ultimately get that truck full. That took us all of 2019 of getting it more wrong than right and then 2020, it clicks. We go from 25,000,000 [04:20] >> to 100,000,000 by the end of the year. We from, we're not totally explicit about the revenue numbers, but more than 300,000,000 at this point already in October. We're many multiples of growth on an annualized basis. [04:34] How are you measuring that, Oren? So when you say 300 in October, what are you taking? October revenue times 12? [04:40] >> Yeah. So that would be, you know, if you said 25,000,000 in the month of September times 12 would be 300,000,000 run rate. We will do more than 25,000,000 in the month of October. So our run rate will be, you know, $330,000,000, $340,000,000, know, give or take [04:55] in the month of October. Mean, that's what everyone listening is gonna be looking for. That 25,000,000 in October revenue, I mean, that's SaaS margins, right? I mean, you're not like having to pay truck driver, that's not like a GMV number, is it? [05:05] >> It's not a GMV number, it is a revenue number, although I would not describe it as SaaS margins to be fair. Have a fair bit of COGS still in this firm. So we've got an incredibly automated middle of our marketplace. The optimization engine and the pricing engine is phenomenal, unlike anything that's ever been built before. The demand side of the marketplace, the manufacturer who needs our services is largely very automated. It's never finished, but we are [05:36] >> thrilled and it is easily stage appropriate. The supply side of our marketplace, we have a lot of COGS. We are still feverishly building out automated integrations with trucking companies, with carriers. So right now, we still have a fair number of humans that are involved in what we call the fulfillment. Hey, Mr. Trucker, are you available? You know, what's the price? Can we get it negotiated? We are that's the primary focus of R and D, you know, [06:02] >> sort of our latest fundraising round, you know, announced about a week ago. The preponderance of [06:08] Hold on, Oren. Don't bury that real quick. How much did you raise with valuation? [06:11] >> We raised $215,000,000 led by SoftBank Vision Fund two. They led our last round as well. This was a real preemption with these numbers. They came to us mid year, six months into the last round and said, giddy up, we'd like to deploy some more capital. Can you go faster? Do you have a use of proceeds? We said yes, yes and yes. And so we raised into $215,000,000 at a $1,300,000,000 valuation. [06:38] 13 you raised back in December, the series c, what valuation was that at? [06:43] >> $460,000,000, $470,000,000. [06:45] Well, okay. Mean, incredible. So SoftBank likes marking up its own portfolio is the lesson there, and you're driving incredible growth. That that's what I should take. Well well, [06:52] >> to to be fair, the latter, yes. The former, no, they they they don't like marketing themselves up. I'm not gonna speak to it but you got a smart audience that that that can be problematic. We brought in other pretty significant investors into the round. I'd say most notably, we brought in Susquehanna. SIG is a major private equity, growth equity fund at $15,000,000,000 to $20,000,000,000. So they're participating in this round. We brought in a firm from New York called [07:16] >> Eden Capital coming into this round. We also had pro rata, in some cases, think super pro rata from insiders. So SoftBank was about half of the check-in this round. You know, we had another 100,000,000 come in on top of what SoftBank wrote. SoftBank wanted to write a much larger check initially up to 300,000,000. And from a round construction standpoint, we manage that number down, I guess it would say, so that our other insiders could also continue [07:45] >> to buy up and we could bring in new capital. Everybody loves to see some new faces around the table. [07:50] Was $215,000,000 the actual size of the round or did you raise a bunch more that went into secondary? [07:57] >> No. It was $215,000,000 was the size of the Was [08:01] it did all that go right to the balance sheet or did you provide liquidity to to some early folks? [08:05] >> A little bit of liquidity to early folks, but only team members, not investors. No investors want it out. I can certainly say that. [08:12] I can, I believe that? And when you say a little to team members, under 50,000,000 of the $215,000,000? [08:17] >> Yes. [08:18] Okay, very cool. Let me ask you a different question. Anyone doing the calculations in their heads, they're thinking $300,000,000 run rate, 1,300,000,000 valuation, that's a very low multiple for others that are at this revenue stage. Would you just say that's because of your cost structure and the COGS associated with the business model? [08:33] >> Yeah, it's largely an issue of COGS. We have to balance that all the time where every founder does, right? As you think about, we call it the balance between fear and greed. And the keyword there is balance. There are times where you don't want to raise because you're very greedy and there's times where you'll take every dollar thrown at you because you're fearful. As a founder, I've been in both of those situations and there's no shame. [08:56] >> You've got to capitalize your business and make payroll. I think the key lies in the balance. Flock is going to be something gigantic. We believe we can build a $50,000,000,000 to $100,000,000,000 revenue firm. I think it's fair though to put us more in an Amazon type quadrant than a Google type quadrant from a cost structure. We are always gonna have some cogs in this firm. And so from a multiple standpoint, they are lower than they are in [09:22] >> a true SaaS firm. I I think that's fair. The flip side is we're in a US $1,000,000,000,000 space and we're gonna build a multiple many billions in revenue in the next three or four years. So I think the the ultimately, the exit value of this business will be in the many, many, many billions going into the public markets. Will stay [09:42] private or do you go public market Q2, Q3 next year? [09:45] >> No, no, no. We want to stay private for at least a few more years. I'd say, let's say three years. This is a bit of a educated guess. [09:53] Yep. Interesting. To me a little bit more about what metrics are important for you internally that might not be obvious to me, right? How do you measure marketplace liquidity, for example? [10:02] >> Well, the key, I think, metrics for us at this point are we're constraining our growth. We could go faster. We need more automation on the supply side, more integration on the supply side. So we're measuring the total number of transactions that move through automation, you know, single digits going to double digits and scaling. Basically what percentage of this business in '22 and '23 can we fully automate what we call quote to cash? So from a customer [10:28] >> who's just beginning their journey with us all the way through to collecting capital. [10:33] Now Oren, that number, sorry, don't mean to cut you off, but you told me last time in 2019, you had 10,000 freight bills go through the platform. In 2020, you said it was between 10,000 and a 100,000 for 400% growth. Is that what you mean when you say number of like quotes going through? [10:46] >> No, I mean, we moved last month now already like 16,000 freight bills in the month. So, you know, that's the growth. When I mean automation, right now on the demand side of the marketplace, it's automated. Customers order via integration or self serve online. Now we have humans here to support that but it's as automated as we kind of feel it should be. Within the middle of the firm, the technology, the hard, hard tech of optimization, the [11:10] >> algorithms, the pricing probability work that we do, that is also automated. But when we get to the supply side, hey, truck driver, will you move this freight and if so, at what cost? How much available space do you have on board? It's only about 10% of the transactions on that end are really totally automated at this point. We wanna take that number up. It's not gonna be a 100% but to 80 or 90. We want to [11:34] >> do that in the next twelve to eighteen months. [11:36] Are any startups that have already figured that out that you'd go buy? [11:40] >> Maybe. We're taking a cold hard look at it. There are a few that make that claim. Unclear it's real. The US truckload industry is enormously fragmented, which in the long run is great news. Marketplaces thrive in fragmentation, you know, little players have a chance to participate day one. The challenge though is there's no like clear aggregated point of volume where you could just go plug into a startup either as a partner or to acquire. You know, [12:07] >> obviously we've got a pretty big balance sheet. We also have enormous capital partners, you know, who would love we had a board meeting two days ago and they're asking me, hey, you know, any acquisition targets? We got our checkbook out. You know, we we feel pretty great about you. And the answer is, you know, we're looking at it. We're looking at it, you know. But it's unclear that that acquisitions are always the panacea that that many [12:26] >> believe. I mean, the the the data on acquisitions is pretty pretty gruesome, know, 75 to 80% of acquisitions destroy value. Flock is not being built to say, yay, we're a billion dollar company, do some secondaries and that's that. You know, flock is being built to be a hardened scalable platform that goes into the public markets and endures for decades and fundamentally changes the way freight moves in this country initially and then ultimately globally. So it's not [12:52] >> to say we're adverse to some easier, fast wins. I mean, are nice to have, but it's not what we're focused on. We're focused on long term value. [13:00] Mhmm. How do you have that long term focus on? I mean, many startup founders, when they hit a 1,300,000,000 valuation, take secondary off the table. It's the first financial windfall for them that's important for them. And then they go take a next big swing. Did you already have an exit before this? So like this is your big swing? [13:14] >> I haven't had exits, but I have founded two previous traditional freight companies and I've made a very nice living for So $10.15 I'm okay. I don't know that I wanna disclose my salary here, but I will tell you, I am far from being the highest paid person at flock. I've got a relatively modest salary and that's okay. I'm playing for the equity and I think and I'm playing for significance and I'm playing for purpose. Know, we're [13:40] >> the only certified B Corp in freight. We have an opportunity to make a 40% reduction in greenhouse gas if we're successful at scale. That's important to me. I want to relentlessly remove waste and inefficiency from The US transportation system. [13:58] >> So I figure everything worth doing is hard so let's take hard off the table, it's not that interesting. I wanna do something that's purposeful and something significant and I think I'll be financially rewarded along the way. So the secondaries are great, give a lot of comfort. There was some wealth distributed last week and I couldn't be more proud to have been a part of that, seeing people on my team the first, the OGs as we call [14:22] >> ourselves. [14:23] The twenty sixteen OGs, you know? [14:25] >> The twenty sixteen OGs having an opportunity to bring some comfort to their families is significant and purposeful. At the same time, we are just getting started. We take this thing in the public markets and we keep going. [14:38] Managing dilution as you scale is a tricky thing. Most founders think about that after the fact and wish they did a bunch of stuff differently. You mentioned equity is really what you're playing for. Can I ask how much equity you've been able to hold on to up to this point? [14:49] >> You can ask, I'm not gonna answer that question correctly. [14:52] Can you give me a range? [14:56] >> I mean, I'm gonna own a small piece of something very big. No, political It's a lot on paper. But look, let me say this that I think is helpful to your audience because understanding my wealth on paper, I don't know if it's helpful. What is helpful? This was advice I was given by my lead investor from Google Ventures who led our series A, GD, guy named Joe Krause. Joe Krause is a super successful founder, founded Xcite [15:22] >> back in the nineties. [15:24] A personal Series search [15:26] >> A. [15:26] Oh, series A only. This was 18,000,000 in 2017. Right? Yeah. Yep. And that you were what? That was probably like what? $90,000,000 to $100,000,000 dollar valuation back then? [15:35] >> No, half that. [15:36] That was Oh, wow. [15:38] >> 57 or 8. Was actually Pre money? [15:41] About [15:42] >> post. Pre was like 41, 42, you know, something along those lines. [15:46] Okay, back And to your Google [15:49] >> what he taught me was, look, you're gonna be taking on a lot of dilution along the way and I get it as a former founder now turned investor, it's gonna make you crazy but let me convince you otherwise. You have a certain number of shares and that number of shares doesn't change unless you sell them. And if you sell them, then you have sold them. But until you sell them, that numerator so to speak does not [16:13] >> change. The denominator of the firm is changing, right? You're issuing new shares every time you raise money. But you have a certain number of shares. Your job is to take it from a tenth of a penny, you know, when you found and you do your hopefully 83 b founders out there, do your 83 b. USPS is real, at least for now, may go But you want that, you really want that. And your job is taking from [16:35] >> a tenth of a penny to a penny, to a dollar, to $10, to $50, to a $100, to hundreds of dollars if you can. So I've hung on to that, you know, my percentage of ownership has gone down. But what is hopefully helpful to some of your viewers and your listeners is I don't think about it anymore, I really don't. Because I need capital. I need capital to build this business. We are not a traditional high [16:57] >> margin, you know, SaaS firm, but we're building something absolutely massive. My job complexity is that, like, we're a big business. Hundreds of millions in revenue, hundreds and hundreds of employees, you know, need to double our headcount How many now? Year. We might How much account? Almost 350, 340 employees. Okay. You know, we're gonna be seven, eight hundred by this time next year. That that's just complicated, right? From an organizational structure and leadership standpoint, that's really where [17:23] >> my, you know, my time is going. But my number of shares doesn't change. But if I can take the share price to a 100, you know, if I can take it to a 150, you know, going into an IPO, you know, that is a lot of money. I mean, it's already a lot of money now. That is a lot of money. So so for the founders out there, you're gonna make yourself crazy going from a 100% [17:42] >> of a pie or two co founders fiftyfifty, however you split it up. Yeah, that number goes down. And for most founders, it ends up in the single digits. I am not yet in the single digits. I will I [17:52] will I was just gonna finish with the last question and say, Oren, I promise I'm moving after this but more or less than 10% but you just answer it. So more than 10% right now. [18:00] >> I'm a I'm a double digit guy but Perfect. To be fair, I was mostly a sole founder. I have I have some co founders that are advisors, they're not operators. So they started with single digits pre dilution and I had basically the whole cap table. But number of shares by the price per share and then get it liquid, that's the job. [18:17] There you guys go. Oren, last question here because you're one of the few I can ask this. You don't wanna use investors almost like employees. You wanna bring them on strategically, give them work to do, and make them hustle like hell to help build the business. How do you give work to SoftBank? How do you ask someone that big, that powerful, that, you know, impactful to do work for you? [18:33] >> Good investors want to be helpful and they know they're not us. So SoftBank is famous, they're infamous, I get it. Working with Masa is a tiny piece of what we do when you're a SoftBank portfolio company, but really you live within your deal team. So within my deal team, who, you know, of course, is on my board, again, board meeting on Wednesday, I challenged my team and a couple of things. I said, number one, I know [18:56] >> I understand how the private markets think. We've raised nine rounds, about half priced kind of series c through series d and also some notes in between, you know, because getting started are bridges, up bridges, down never down bridges, but kind of the good bridges and the and the hard bridges along the way. And I'd said, look, I know how the private markets think about us. I understand what the story is. I've done it nine times. I [19:17] >> understand what the key metrics are in order to create shareholder value. I don't yet understand the public markets and yet this business is headed to the public markets. We're not yet ready to hire a banker. We're not yet ready to start talking to the exchanges. So it's I wouldn't quite call us pre IPO, but we're pre pre IPO. Meaning, find me people that can educate me on the story and under the key metrics to understand how [19:39] >> we need to shape this firm over the next two or three years to get it ready for the public markets. You find those people, I'm too busy. Go to work. Number one. Number two is talent, talent, talent. You know, we're looking for a vice president of engineering, a VPE. You know, our our VPE was promoted into CTO. He's phenomenal. Lou Signs, the first person we hired, absolutely transformative. And now, you know, now we need to recruit [20:02] >> a VPE into VPE to replace them on the day to day. Tough role to fill as you can imagine, you know, tough labor markets, you know. So I put my investors to work and I literally said this to them, I would say founders also don't be shy of putting your board to work. I know you love all your kids equally, meaning your portcos, but you love me a little more. Send me the top talent. Let me [20:23] >> know if there's a company dying, we could do an acquihire. You see a lot of things I don't see. Love me just a little more than your other children and help us bring out a world class VP. [20:32] Guys, there you have it, Orin Flockfreight. Orin, if people wanna learn more about you and the business, where can they visit? [20:37] >> Flockfreight.com. You can drop me a note directly, Orin, O R E N, flockfreight dot com. I promise that's me that doesn't go to marketing or somebody else, and I'd love to meet folks. [20:47] And the 1.3 valuation pre or post? [20:50] >> Post. [20:51] It was post. Guys, there you have it, incredible growth, 75,000,000 in terms of run rate, just, well gosh, ten months ago, now over 300,000,000 in terms of run rate, 25,000,000 a month and growing very quick. They'll double their teams over the next year, really focus on building a decades long company, eventually in the public markets, call it in two to three years. We'll see what happens next. Oren, thank you for taking us to the top. [21:09] >> Thanks for having me on. [21:11] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM [21:37] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [21:59] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up [22:21] for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. [22:40] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.

Introduction hello everyone my guest today is oren zizlansky he has logistics and innovation running through his veins he followed his parents footsteps who created their own freight forwarder after years with foreman's van line he founded his own 100 truck fleet at age 20 providing white glove freight service through the u.s and canada next came sole source oran's first brokerage which services major clients like whole foods and opened his eyes to the unnecessary complications and inefficiencies of lfl shipping aren't you ready to take us to the top i am thanks for having me so you through all this experience you've now built flock freight let's start with a tease there and then get more of your history what's flock freight doing today we do uh we create what we call share truck loads or algorithmic carpooling so it's a little complicated thing to think of but if you have four pallets of commercially manufactured goods and you're in la and you want to ship them out to chicago you would otherwise move them through the ltl industry less than truckload industry or hub and spoke model so just think terminal terminal terminal ups without the aircraft what we do is we come in and we use some really sophisticated algorithms to match your palletized freight with our other customers palletize freight and instead create a carpool or a shared truckload so we just book a big truck out of the full truckload industry have them make multiple pickups picking up our various customers loads and shipments and have them drive direct to destination the reason the customer cares is that by making a hubless offering no terminals no warehouses it picks up on time delivers on time it's faster there's zero damage no loss no theft it's just a much much higher quality offering um and it's a much greener offering about a 40 reduction in greenhouse gas as the only certified b corp in the freight industry uh because our model effectively um you know negates or disintermediates the use of terminals it's we like to say algorithms instead of warehouses it was 2002 or 2003 i forget which but i was rereading bezos annual letters and i remember one of the key metrics they tried to drive down and 0203 was number of contacts and it's exactly this thing that you're talking about so real quick before we get your back straight can you help me try to understand the economics this has sort of formed a lot of people if i want to ship two full trucks from la to chicago and let's say they're adidas shoes what am i likely going to pay for that so the way to think about it i'm going to give you some really simple kind of silly math but this is just i've used this in fundraising and again it's a reflection of very sophisticated audiences but taking a lot of industry experience and kind of putting it to layman's terms so imagine you could typically fit 26 pallets in a big truck a full truckload carrier truck the big ones you see on the freeways if you could fit 26 in there we'll just imagine that trucking company is going to charge you 26 to go from chicago to los angeles we can infer that that's a dollar per pallet right 26 dollars to fit 26 pallets now to be fair that trucking company is not charging you a dollar per pallet they're charging you 26 whether you put one pallet on board or 26 pallets on board you're going to pay 26 bucks you're a smart guy you want to get the truck full you want to get your lowest possible unit economics you put 26 pallets on board you have in your head a dollar a pallet conversely now you're a small shipper or you have a small order it could be a big shipper but you have a small order you just have one pallet to ship that's it it doesn't make sense to buy the whole truck for 26 dollars right so instead you go to the ltl industry these hub and spoke operators the ups fedex without the truck without the um aircraft they charge you two dollars to move that one pallet that's what we do that's what our financial model is is that instead of charging two dollars and paying almost two dollars we can charge two dollars and pay one dollar because we're buying it's like we're syndicating that entire truck we're taking all the risk and telling the customer don't worry about it i'll find the other 25 pallets to go with your your one pallet it'll never move through a terminal it'll never be unloaded uh bigger faster stronger you know on-time pickup delivery no loss no theft no damage faster transit times that's financially what we're doing interesting super interesting and and again before we go back to your the younger orrin um in 2020 with the pandemic happening like what's the big usage metric you track is it's not a number of pounds it's probably two minute is the number of truckloads or like what's the thing you track mainly yeah it's it's what we call a freight bill that would be like a standard unit of measurement in this industry a freight bill would be not a pallet but it would be a shipment so a shipment might be two pallets it might be 15 pallets but we would call that one freight bill and we've seen our so how many shipments we move um on an annual basis we had 400 percent growth um in the year of 2020. that's incredible are you sharing with the actual nominee it's gonna be in the millions right tens of millions um in terms of shipments or in terms of revenue that number you just gave me freight bills uh no it's not millions yet it is um that's a fair question it's tens and tens of thousands you know i don't know if we're at quite a hundred thousand yet but but we're getting very close that's got it so somewhere between 10k and 100k and that's just again number of freight bills as small as two pallets as large as 24. almost a full truck where we can still optimize and we can take that very big shipment and find a couple pallets a small shipment and put them together and ride share create a shared truck and can you put a face on this i mean is this the etsy ecommerce seller that needs to move like three like what is the face of the person that actually you know yeah we launched the business in the smb so small medium businesses that were small they had small quantities and they did not ship very often it's a great um playing ground to invent if not it's a little messy now we're playing much more in the middle market with enterprise customers so you know it could actually be a very big customer we'll use like um you know an almond manufacturer um is one of our biggest customers where you know a full truckload of almonds could be 40 000 pounds that's a lot of almonds to go into a box you know or to go into a 7-eleven so even though they're a 10 billion a year massive enterprise shipper they would have a need to only ship four pallets on you know out of their facility going to um a distribution distribution point now they may ship a full truckload of almonds into a costco or to an amazon fulfillment center but then they may turn around and ship a single pallet to 7-eleven so it's all b2b or what we call in the industry kind of dock to dock so what we don't yet do is residential we've done in the past but it's not who we are it's not who we believe we should be for quite some time instead we're going from a manufacturer that has made something or is a distributor of something and going to the receiver or their customer a very common pattern would be people who make stuff and it's going to an amazon fulfillment center or they make things that's going to a mall or some type of distribution center so i would not quite say etsy i would say more like a 25 million dollar minimum side manufacturer that's their revenue not their spend on freight but that's how big a firm they are up to you know several billion dollars a year again you know the abm beds of the world and in 2020 how many unique shippers shipped at Currently serving 2000 customers least one thing with you one freight bill like 2 000. oh wow okay and i just am really uneducated in the space i mean what percent is that of the total brands shipping something it's it's it's bips okay the beauty of this industry right so yeah we'll just say u.s freight is believed to be like a trillion dollars across all the varying ways that you might move things and look we're not a tiny company anymore we've had explosive growth we plan on growing a ton more but the reality is that you know it's it's basis points so yep um how do you guarantee that you have the truck inventory if i believe ltl's paying the same as you are but you're just doing it more efficiently like how do you make sure you have enough trucks if there's a christmas blip or something yeah that that's not just the billion dollar question that these days the 10 billion dollar question yeah trillion dollar question uh it is really hard so one of the hardest things but i would say the most fun and most interesting things that we do is we work in probabilities so we have a lot of applied data science and machine learning environments here where we are constantly ingesting as much data as we can uh from third-party data lakes so data sources where you can build a an integration with and you bring in the like what's the spot market doing what what's tender rejection meaning freight that's not getting picked up for you know if there's freight not getting picked up you can infer there's probably not a truck in that market to pick up that freight yep um furthermore we shape that with our own internal analytics our our own team of people talking to the world and then lastly working in probabilities what's your belief that that truck's going to be available and not only available in a binary non-binary way it's yes it's available no it's not but also if it's available what it's going to cost you know it's a spot market so it may be a low price today it may be a high price tomorrow and then to really blow this thing up wait sorry i don't understand that what what could what varies in price the dollar per 26 pallets could go up or down yeah the cost of contracting that entire truck he may charge you a thousand today at maybe 900 tomorrow could be 1200 the day after that especially around the holiday time so the context of your question given holiday you're right right demand is surging right now supply is kind of fixed right this is not a gig economy the way we see with like uber and lyft in rideshare or doordash or instacart those are good economies whereby uh in theory supply conflicts with demand um in our space you're a commercial truck driver driving a hundred thousand dollar tractor trailer full-time your drug and alcohol tested you know this is what you do it's not a side hustle like you were either a truck driver or you're not a truck driver so supply is changing don't get me wrong but it's relatively static demand is porpoising like crazy whether it's covet or holiday time so that's where the data and the analytics and and the data science and trying to predict what the future is going to look like all the way through to in our case not just can we get a truck or not and not just how much is that truck going to cost but what is the probability that we'll have many different customers freight bills or shipments that are going to tetris fit together into that truck at what variant costs i mean that's honestly i think the number one reason why uh softbank made the investment as they did is they looked at the hard science the hard uh the algorithms the mathematicians the data scientists that we employ to not just predict a future of is there a truck or not but to slice those trucks into little bits and pieces and then try to determine are you can you see the future and in our case with all the data that we're building and every shipment we move becomes a data point what's total team size orange today and how many of them are data scientists or engineers uh we're about 130 w-2s you know basically here in san diego we do have a few people scattered throughout the us particularly over covet you know we've been pretty agnostic to that we just want great talent and then engineering mathematicians which we'll call part of the optimization group data scientists analysts analytics uh that represents about half the payroll oh wow okay so call it 765 people there do you have any quota carrying sales reps oh yeah yeah yeah how many she's 30 35 and you know and they're selling to like the head of shipping in these massive billion dollar brands yes and uh they're selling to a manager of shipping at a 50 million dollar manufacturer that you know you and i may have never heard of and they make you know tables they make chairs and they you know have a need for our services as well and with all these operations sort of coming together i mean do you know i mean it's obviously i mean it's definitely maybe the millions tens of millions how many individual pallets you shipped in 2020 do you know that number um if i were to make a guess i'd say if we're getting close to 100 000 shipments per year you know you could say that times maybe five so maybe a half million pallets oh this is back of the napkin right yeah yeah no no i'm in the ballpark yeah no no i mean that's what i wanted i mean i would be shocked if you knew the exact number down to the actual palette and that's obviously changing by the day um Raised talk to me about softbank they just wrote a check what was the size of the check and how much have you raised a date total uh softbank's investments 100 million dollars we also brought volvo in which is a really exciting strategic for us both for a commercial partnership they spend a lot of money on moving freight and they do it some optimally and they want to partner with us but also to work with their innovation labs on really defining what the future of transportation will look like autonomous driving vehicles as an oem they make these trucks or they're working on that technology how a marketplace partnership like us could work with a volvo over the long term you know we think of volvo here in north america as these like lovely swedish cars and they are but but um not a lot of people know they're like the second or third largest truck manufacturer i say truck i mean like tractor trailer you know freight truck in the world i think them and daimler are you know the biggest in the world so in the us they own the brand mac truck which more people are probably familiar with um and then we have participation from all of our insiders google ventures signal fire and gop um at that point you know we set out to raise honestly 30 to 50 million bucks we ended up raising 115 so it was a bit of like no more capital can come in work with your insiders to you know prevent too much money from coming in um and that puts the total raise at a 180 185 million something like that and in that soft thing deal i mean were you able to stay you know let them put in more cash but still stay under and sell less than 10 of the business in other words i'm really really asking is north of a billion dollar evaluation south of a billion dollar evaluation got to be flirting with it oren uh it's south of a billion dollars yeah everyone's trying to get us on this one i know look um it's a couple ways of thinking about it one is you know it is freight we have a lot to prove it's a huge space um we're going after something much more complicated than has ever been pursued before and that's the true invention of a new mode of shipping freight there's the less than truckload mode pallets through terminals there's the full truckload mode fill the truck up at a single manufacturer send a truck down the road those are the incumbent modes we're this space in between and encompassing both which is shared truck load that's a mode that we've invented so it's obviously a lot riskier number one number two is you know you don't hear a lot of founders say this you got to be careful with valuations that becomes a market clearing price that you got to get over the next time and nobody wants to get over it by you know one or two percent right we want to be like doubling you know tripling quadrupling on these uh share prices round over round and as you start talking about billions which is certainly the ether you know that we're we're playing around in you also have to start thinking about what exits look like you know in my case i want to go into the public markets i mean i want to do an ipo and do the road show the whole thing um that's you know ring the bell in the nasdaq i mean it's just something really excited about doing um and so you want to make sure that you're going to create you know real long-term shareholder value as well that is a creative to your insiders as well as to that next set of investors is charging these 2000 customers two dollars per pallet and then you buying the pallet for a dollar region and optimizing your only revenue stream or there are other ways you make money no that's it that's what we do okay i'm doing i'm missing something like very Monthly recurring revenue obvious here so i'm just going to ask it directly if you're shipping 500 000 pallets per year charging two that puts you like a million in revenue per year there's no way you're doing a million in revenue per year we're doing many many yeah more than that so the two dollar versus one dollar is just meant to be a simple metaphor to whereby to understand this god we you know you can imagine though if i if i uh buy if i sell it two dollars and i buy it one dollar buy low sell high yeah like the real estate guys tell us then we have um for freight like 50 margin potential um in an industry that supports like 10 to 12. so we have many times a higher margin potential than anybody ever in freight before because of this financial arbitrage that's unlocked we we have not publicly disclosed as of yet revenue but i can tell you we are orders many orders of magnitude um higher than that yeah you had a couple million bucks i'm going i'm missing something very obvious here and it's the obvious thing you gave a metaphor you know renting out a whole shipment a truck it cost way more than 26 bucks for for the truck yeah i apologize in real dollars it'd be like three thousand dollars four thousand dollars to run that lane and if it's four grand i could charge eight grand you know it was the two to one that i was hoping to highlight yeah yeah okay got it but but generally like a truck like that la to chicago it's like four grand something like that in today's market yeah yeah yeah okay interesting um vault i wanna talk volvo real quick because this is gonna go back to your roots in terms of you maybe buying your first truck running those first routes back when you were younger at some point it makes sense for you to start if you're not already holding cars maybe autonomous trucks on your balance sheet uh maybe from volvo by the way you know what is the tipping point where that starts to make sense it's a good question look i've told people whether it's media or colleagues or people on the team i don't personally think we're going to see another parcel carrier parcel would be like fedex ups start ground up like ever i think what we'll see is is amazon come in and build the largest parcel carry in the world sort of from the side door or top down depending on how you want to think about the metaphor you know we're seeing amazon become the world's most vertically integrated firm which is not to say they don't use a tremendous amount of contract support top to bottom they do um but they're operating their own aircraft they're operating their own trucks their own warehouses i mean at some point it's interesting amazon tech company tech company they absolutely are a tech company the data insights they have i mean they know what you and i are gonna eat three days from now i mean they do uh it's the world's largest machine learning environment as best i could tell that being said um they're a logistics company and they're going to be one of the largest logistics companies if not the largest in the world no matter what how do i think about that i want to stay tech as long as we can um i i don't see a world in which we start operating warehouses and terminals that would be antithetical to our very model we are the contactless yeah we don't want to touch the stuff um i could imagine a future state um whether it's a partner like a volvo or in some other way shape or form where with autonomous driving vehicles we want to be pretty closely snugged in we love av autonomous vehicles like we oh my is this an enabler for us in a very big way that being said um with all due respect to our capital partner and all those fine folks out there working on it um it's not going to happen in this decade in a meaningful way we'll see the middle mile which is you know like running down the freeway um we'll see robots now that being said they'll be humans who are being paid to still be on board those trucks for many many years but to get to a future state where what we call the first mile and last mile that's backing out of a dock now picture your neighborhood or commercial district and ultimately getting onto the freeway and then the last mile is that process in reverse you know getting off a highway exit navigating through urban rural environments backing into i mean you can picture what this would look like um i think that is a long way out that being said when not if yeah looking at a regulatory problem as well interesting yeah interesting quickly uh before we wrap up here you launched company what year uh commercial launch kind of official first round hire first employees january of 2016. it was a year and a half project side hustle for me prior to that how much revenue did you in year one do you remember yeah well run rate revenue in year one i think we went out at about a two million run rate and uh two and a half million run rate of revenue and we were pretty darn proud of that that's pretty you should be really proud of that um and then last growth question you mentioned freight bill growth year over year 2019 and 2020 was 400 percent is that the same that revenue growth is the same about 400 percent or lower yeah no no it scales pretty well that's correlated that's i mean i imagine you have some serious scale growing at your scale at 400 years it doesn't surprise me softbank comes and says please oren please let us put in a hundred million it it it went well anything else i haven't asked about that you're like why hasn't he asked about this it's critical to our business um no you know i'd say you know we are really proud and passionate um about being the only certified b corp and freight so you know we have an opportunity here kind of from a social entrepreneurism angle to create significant market value you know real returns for our investors and ultimately in the public markets and have a real market cap we want to build both the largest freight company in the world and the most profitable freight company in the world we want to do both of those things the scale will come before the profit but we intend to do both while we simultaneously help do our part to save the world you know we believe passionately there can be a 40 reduction in greenhouse gas through our model so much so that we're on the precipice of being able to launch actual carbon credits to our customer for buying from us because the model is so much more efficient um you're actually kind of getting the the first word on that externally that we're in the process of bringing that to market right now the outside world doesn't know it yet but we've got a certifying entity of like actual carbon credits not some wow white labeled you know off-market product but like you know tesla carbon credits so to speak uh to toyota um of bringing that to market now because the the certification entities are looking at what we're doing and saying man that is no joke that is so much more efficient and of course we believe that it's an awesome opportunity to drive additional acquisition retention but to further drive our our purpose of saying you know we think we can build a very viable asset while at the same time helping to do our part to save the world or an incredible story let's wrap up with the famous five quick answers your number one favorite business book five dysfunctions of the team number two is it's a good one yeah number two is there a ceo you're following or studying bezos constantly remember are you an acquisition talks right now with amazon no okay number three that's good straight face you like how i sneaked that in like that was pretty good right i'm under so many non-disclosures right now [Laughter] all right good number three what's your favorite online tool for building the business oof um online tool for building the business god we live on slack it's just horrifying but we couldn't live without it number four how many hours of sleep every night six it's pretty good situation married single kiddos married two kids 18 14. wow and how old are you 46. take us home what do you wish you knew when you were 20. what did i want to do when i was 20. something you wish you knew when you were 20. i wish i knew um oh man i wish i knew that i was going to make all the mistakes i've made but to not be so hard on myself for making them and to realize that their each one is a little gift that's going to ultimately make me better guys flockfreight.com think of it like pooled trucking a lot of logistics over 65 data scientists engineers on the team of 130 when 50 of your folks are made up with that kind of background you know there's some serious tech there they raised 180 million bucks today serve over 2000 customers their freight bill growth year over year has been over 400 revenue growth is also in that same categories they look to continue to scale with things like eco credits do a great part and do their job in the world but also do it profitably over time as they reach additional scale oren thank you for taking us to the top thanks for having me one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sass we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or 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