Logistics practitioners often have to deal with the fallout of a lack of coordinated planning in pre-freight activities, which tend to not be digitized in a common location. Photo credit: Shutterstock.com.
Logistics software provider Mercado on Tuesday said it has raised $2.5 million in venture capital to expand its sales and engineering efforts as it builds its platform to manage a range of pre-freight activities for which shippers usually don’t use systems.
The new round, which CEO and founder Rob Garrison characterized as opportunistic, comes eight months after the Dallas-based startup received a $3.2 million seed round to address what he calls the “first-mile” challenge shippers face.
“When you look at international supply chains, it takes on average six months to plan, buy, move a product,” Garrison, who founded Mercado in 2018, told JOC.com. “For the first five months, there’s no sherpa or forwarder to guide you. But if you can start at the planning process and digitize the order, you can take a ton of time away from the process.”
Garrison has a wide view of the technology challenge facing shippers, having spent years as a logistics executive at Michael’s Stores and Sears, before serving in roles at logistics providers, including UPS, FedEx, and NFI.
His contention is that there’s a dearth of software designed for the processes before goods become freight. That scarcity creates inefficiencies, but also hampers a shipper’s ability to pivot as circumstances change, according to Garrison.
“There’s [purchase order] management, but PO management is really PO tracking,” he said. “That’s good, you can tell the customer the product (is) on the plane or ship. But you can only do so much once it’s in transportation and it could be fatal to deal with a situation at destination. You may not even need the product anymore.”
‘Manual and messy’ process
Mercado, which currently has 20 shipper customers, tries to organize what Garrison said is a manual and messy process, from creating a digital order, monitoring production, coordination between factory, supplier, a forwarder, dealing with customs compliance, and any other provider that’s attached to a specific order and subsequent shipment. “We want to give transparency to the whole process, give them a workflow and eventually automate a lot of it,” he said.
The platform is already integrated through application programming interfaces (APIs) with logistics transportation management software providers WiseTech Global and Descartes, enterprise resource planning software like Oracle and SAP, and customer relationship management systems providers like Salesforce and Hubspot. The system is designed to connect via API to whichever entities a shipper needs to connect with, Garrison said.
The new funding round will go in part toward accelerating the automation part of the platform, since early efforts were spent just convincing shipper customers to use any platform at all. The new round will also go toward sales and marketing efforts, he said. “We have product-market fit, and now we need to raise awareness.”
The funding round Tuesday was led by Ironspring Ventures, which focuses in part on companies that are digitizing industrial supply chains, and joined by Supply Chain Ventures, led by early stage veteran Dave Anderson. Investors in the $3.2 million seed round in November, LiveOak Venture Partners, Schematic Ventures, Story Ventures, and Amplifier, all participated in the new round.
“The current pandemic has rapidly accelerated Mercado’s customer traction as importers realize both the growing complexity associated with conducting international trade and the need for a solution to reach into the earliest phases of purchaser and supplier collaboration when a purchase order is placed,” Ty Findley, Ironspring Ventures managing partner, said in a statement.
Findley will join industry veteran and former GT Nexus founder John Urban on Mercado’s board of directors.
Contact Eric Johnson at [email protected] and follow him on Twitter: @LogTechEric.
