August Capital, Bain Capital and Hyde Park Venture Partners-funded FourKites facilitates real time data for the transportation sector and aims to get a billion dollar valuation in the next three years
What triggers one to become an entrepreneur? A personal, unsatisfying experience? An idea that you have been nurturing for a while? In Matt Elinjickal’s case, it was identifying a pain point during his professional journey. He was hired straight out of college by I2 Technologies, an American company that provides software and consultancy for supply chain management, manufacturing planning, category management solutions and more. Having worked on enterprise products such as transportation management system and supply chain tools, Elinjickal recalls, “This is where I learnt the traits of the transportation sector and identified a key pain point; the lack of real time communication in this sector,” shares Elinjickal. Every truck has a GPS, every driver has a mobile phone and there is a lot of data present. “Why then, can’t we get this data in real time?” asks Elinjickal. When he shifted his job to Oracle, he worked on similar products with similar challenges. This got him thinking about doing something of his own in this sector. But before he ventured out, he joined a B-school and upon graduation, in 2014, he got a term sheet of US $1.25 million from a Chicago based VC firm for his idea. These were the sowing seeds for his maiden venture, FourKites, which he founded along with Arun Chandrasekaran, the present CTO of the company.
FourKites was set up as a SaaS-based company that does real-time data tracking of shipments. It predicts when shipments will arrive at scheduled ports, monitors load temperatures and analyses enterprise supply chain data. Elinjickal shares, “The reason why we have demand in the market is because of the pressure that companies are facing. In the B2C business, customers have data on their finger tips. Seeing this, B2B companies want real time data as well.” FourKites’ algorithm determines and analyses shipment arrival times, which helps customers lower their operating costs and improve on-time performance among other things.
The company’s solution is used across sectors like retail, manufacturing and shipping. It currently has a network of more than four million GPS/ELD-connected devices and covers all modes of transportation – ocean, rail, and road.
Enabling Data Tracking
In 2015, within 3 months of launching operations, FourKites identified its product market fit and had to pivot its business model accordingly. It was selling to the freight brokers during its early days of operations. However, the team understood that it was not the right market for them and started focussing on shippers. Soon after, the same year, it got its first customer, Smithfield Foods, a meat processing company. On the same day, the company got sued by its competitor, MacroPoint, for patent infringement. Elinjickal says “With our investors backing us, we sued them back and won the lawsuit.” After this, it was growing northwards and gained many large enterprise companies as its clients. Some of its customers include among world’s largest shippers such as Best Buy, Conagra Brands, Kraft Heinz, Nestlé, Perdue Foods and US Foods, among others.
The reason why we have demand in the market is because of the pressure that companies are facing. In the B2C business, customers have data on their finger tips. Seeing this, B2B companies want real time data as well
It raised another US $1.25 million in January 2016 from its investors. The same year, the company got selected by Gartner as a Cool Vendor in Supply Chain Technologies in 2016. Soon after, it raised Series A to the tune of US $13 million and followed it up with a US $35 million round in 2018, led by Silicon Valley-based VC firm, August Capital and its existing investors Bain Capital Ventures and Hyde Park Venture Partners. Elinjickal indicates that the funds from the recent round is being channelised towards doubling its engineering team and building new teams by end of 2018. It also plans to invest in R&D, product and engineering, especially in omni-modal tracking, end to end visibility and predictive analysis. The company currently has a team size of 180, with its sales team is based out of North America and R&D team based in Chennai. The team plans to launch a customer support team in the city, shortly.
On a Steady Path
“2017 was a great year for us,” recalls Elinjickal. The company’s revenue increased from US $2 million to US $10 million and it gained almost 70 customers. It also expanded international markets and signed its first global deal with Unilever Plc for tracking supply chain across Europe and Anheuser-Busch InBev in South Africa. In fact, it has also been named as one of the ‘Top 25 Technology Companies To Watch Out For’ in 2018 by The Wall Street Journal.
Talking about the road ahead, the entrepreneur says, “Our investors are thinking long term and we are committed for the same, given the huge growth potential.” In the U.S., trucking sector spends around US $700 billion and the tracking market is a multi-billion dollar opprtunity. “Tracking is just one of the products in the trucking industry and is more like scratching the surface. But once we have data, we can do more, like predictive analytics, truck capacity management and so on,” opines Elinjickal. With all its strategies in place, like new product launch and market expansion, FourKites is all set to work towards its aim of getting a billion dollar valuation in the next three years by building a public, disruptive company.
Founders: Matt Elinjickal and Arun Chandrasekaran
Funding: US $35 million Series B from August Capital, Bain Capital Ventures and Hyde Park Venture Partners
City: Chicago, U.S. and Chennai, India
FourKites is a SaaS based company that does real time data tracking of shipments. It predicts when shipments will arrive at scheduled stops, monitors load temperatures and analyses enterprise supply chain data. This helps customers lower their operating costs and improve on-time performance, among other things.
5 Insights On Building A Venture
- In a start up world, people build a company and then try to attach a pain point to it. Identify the pain point first and then build a company.
- In a B2B space, the initial 2 to 3 customers can make or break a company. You have to be flexible and willing to do whatever it takes to make the customer engagement successful. For us, Smithfield is one such client who does a lot of marketing for us.
- Building the right team is very important.
- It’s easy to get distracted during the early days. Customers may pull you in multiple directions. Stay focussed.