How Flock Freight CEO Oren Zaslansky grew Flock Freight to $646.5M revenue and 2K customers in 2024.

hey folks my guest today is oren zazlansky he's the ceo and founder of flock freight and lead strategy fundraising and executive talent recruitment he also works closely with sales development product and fulfillment teams they are building an algorithmically carpool ltl freight sas tool it's a mouthful the growth is incredible aren't you ready to take it to the top i am thanks for having me today i don't want to bury a lead here so i had you back on i had you on the show back in december we did an interview record 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 million bucks in run rate i wanted to feature you in an upcoming issue of the magazine so i pinged you just to confirm the numbers and you said nathan we're at 300 run right now million what is going on how did you get this much growth so quickly uh well i think it's fair to say we've we've achieved product market fit um it took uh we're almost six years old the end of uh 2021 will be a six-year-old company and the first four years were excruciating i cringe sometimes when i meet people today and they 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 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 um you know a very agile environment until we really understood what they needed and we figured that out in early 2019 and that was a guarantee of a shared truckload at the point of purchase for the first three years we were waiting for dive deep into that dive deep what that means for people not familiar with trucking yeah so you know the common way of moving palletized goods first of all goods move on pallets uh in the united states so you're a manufacturer and you've made tables chairs computers food you know 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 um and that is unfortunately a very low quality it doesn't pick up on time doesn't deliver it gets damaged things get lost and stolen it's expensive uh and it's slow you know 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 i have four pallets i have 12 pallets i don't really want to see my goods take forever and get lost and get destroyed what is the alternative and we would say well we're going to use our technology to create a ride share a truck share program for you one truck one driver and we'll make sure that truck is full uh and so initially for the first three years of the firm you could imagine if you're building a carpooling model there's technology uh challenges but there's also just what we call liquidity you need marketplaces marketplace gotta line up time and space simultaneity so um 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 you know raising capital and and and bringing on customers and retaining them but the customers told us if you could guarantee that at the point of purchase that i wouldn't have to gamble on this then you would just something just to be clear these truck drivers you're trying to sign up to add liquidity to your marketplace and they're saying aaron like i'm not going to go through the work of signing up if you can't guarantee my truck's going to be full this is why this is important to you is that right well there's two components to it that's the supply side of the marketplace yes on the demand side of the marketplace as a manufacturer as a shipper that says if you can guarantee my four pallets move hubless don't see eight trucks eight drivers eight terminals if you can guarantee me that if i do business with flock freight they'll move on one truck one driver and never move through a terminal that was the big that was the big activation moment the big aha moment so we built that and that meant uh 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 um that took us all of 2019 of getting it more wrong than right um and then 2020 it clicks we go from 25 million to 100 million by the end of the year we go from you know we're not we're not totally explicit about the revenue numbers but but more than 300 million at this point already um in october you know so we're many multiples of growth on a manualized basis how are you measuring that rn so when you say 300 in october what are you taking october revenue times 12 yeah so that would be you know if you said uh 25 million in the month of september times 12 will be 300 million run rate we will do more than 25 million uh in the month of october so our run rate will be you know 330 340 million um you know uh give or take a i mean that's what everyone listens to me looking for that 25 million in october revenue i mean that's sas margins right i mean you're not like having to pay truck driver that's like not like a gmv number is it uh it's not a gmb number it is uh a revenue number although i would not describe it as sas margins to be fair um we we have a fair bit of cogs uh still in this firm so we uh we've got an incredibly automated middle of our marketplace the optimization engine and the pricing engine is um is phenomenal right like 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 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 um we are that's the primary focus of r d you know soaring our latest fundraising round you know announced about a week ago um the preponderance of christmas don't bury that real quick how much did you raise with evaluation uh we raised uh 215 million dollars led by uh softbank vision fund two they led our last round as well this was a was a real preemption you know with these numbers they they came to us mid-year six months into the last round uh and said you know giddy up uh 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 um and so we raised into 215 at a 1.3 billion dollar 113 you raised back in december the series c what valuation was that at uh 460 470. well i mean incredible so softbank likes marking up his own portfolio is the lesson there and you're driving incredible growth that's what i should do well well to to be fair uh the latter yes the former no they they don't like marking themselves up i'm not gonna speak to it but you've got a smart audience that that can be problematic um we brought in um other pretty significant investors in the round i'd say most notably we brought in susquehanna uh sig is a major uh private equity growth equity fund at 15 20 billion dollars so they're participating in this round we brought in a firm from new york called eden capital coming into this round we also had pro rata in some cases i think super paratha from from insiders so um softbank was about half of the check in this round you know we had another 100 million dollars come in on top of what softbank wrote softbank wanted to write a much larger check initially up to 300 million um and from around construction standpoint we we you know manage that number down i guess it would say so that our other insiders could also continue to buy up and we could bring in new capital everybody loves to see some new faces around the table was 215 the actual size of the round or did you raise a bunch more that went into secondary um no it was uh 215 was the size of that was a point did all that go right to the balance sheet or did you provide liquidity to some early folks uh a little bit of liquidity to early folks but only only team members not not investors no investors want it out uh yeah i can certainly say that i can i believe that and when you say a little bit team members like under 50 million of the 215 yes okay very cool let me ask you a different question anyone doing the calculations in their heads they're thinking 300 million dollar run rate 1.3 billion valuation that's a very low multiple for others that are like at this revenue stage would you just say that's because your cost structure and the cost associated with the business model yeah it's largely a an issue of cogs and we have to...