CargoX is Brail's version of Uber Freight and its founder Federico Vega's crossed the $200 million in yearly revenues in 2017.
While the world's logistics eyes are on Uber Freight, a Brazilian start-up has been quietly working for six years with dedication, focus, and determination, and has surpassed all its global competitors in style. It might not make billions, it might not be global, but CargoX delivers both the cargo and the income to match.
Since the Brazilian entrepreneur Vega started his company back in 2011, he has been working hard in Brazil, which is enough to keep him off the global radar, and allowed him to evolve his business gradually and with success year after year. Today, CargoX is one of Brazil's top trucking companies, which is the worlds third largest trucking market with 2.6 million vehicles hauling freight daily.
CargoX provides a platform that connects drivers to companies, and the company (CargoX) handles the shipping, insurance and risk papers, taking only 15% of the shipping fee in payment for services.
CargoX founder Vega stated to the press that "In the U.S. people want to build the next Facebook and create a new category, but in Latin America, there are still big categories like trucking untouched. I thought I am Latin American, so I have an advantage. And I had the knowledge of technology to bring to it."
Vega's originally comes from Patagonia, where he biked the 900 miles to Buenos Aires, the capital of Argentina. He then relocated to Spain where he then biked to the UK and studied his masters at the University of Southampton. He would fix bikes for income. After getting his degree, Vega worked for three years in JP Morgan, during his tenure in JP Morgan, Vega had an idea around logistics, and he decided to start a venture. His boss at JP Morgan agreed to invest in Vega's new business, and that is the moment he decided to begin developing his app.
While Vega was building up CargoX, he realized that Brazil was the market that would provide full capitalization. However he met with a Brazilian silence, and so Vega then went to the US to find investors to help him expand. He met with Uber's CTO and co-founder, Oscar Salazar. Salazar prompted Vega to "Uber Freight" his business, and that is what he did. In fact, he realized that this was the real way to go, and his service provides a more efficient income for drivers since around 40% of all drivers would end up hauling empty after a delivery. With the new app. CargoX manages to bridge the vacuum of orders that would occur after loads were delivered. Now drivers can maximize their time with hauls.
CargoX might not be well known anywhere apart from Brazil, but due to its constant rise and success, Vega managed to gain footholds in Goldman Sachs and Qualcomm Ventures, whom both invested a total of $34 million during 2017. CargoX also expanded its staff from 250 to 400 in under a year.
Goldman Sachs released a statement to the press after their investment in CargoX, "The Brazilian trucking market represents a multibillion-dollar opportunity, and we believe that CargoX's exceptional technology combined with a strong execution team can significantly increase efficiencies to truck drivers and shippers. CargoX has experienced impressive growth since our original investment in 2016, and we are excited about the future potential growth."
Vega's dream is to continue expanding his empire and become Brazil's top trucking service provider in Brazil. This is a big dream, especially when you consider the fact that currently I only hold around 3% of the market. When realizing this, the $200 million is just the tip of the trucking iceberg in Brazil. Based on continuous expansion, CargoX should realize its first annual $1bn by 2021.
I don't think that CargoX will go to the US. In comparison to Brazil, the US market has a number of app providers, such as Uber Freight, KeepTruckin, and Convoy. The US market is huge, with over $726 bn in gross annual revenues, and employs 3.5 million drivers. However, CargoX has enough on its plate in Brazil, and should it consider expanding out of the country; there are enough neighbors to consider well before moving into US territory, where Uber Freight and other competition is ready to put up a strong fight. Vega stated that "Brazil is complex and difficult as it is and coming to the U.S. would be hard."
The current focus of CargoX is on hiring talent, so Vega is targeting Silicon Valley and hoping to find some key players that will help his technology division. Although, Vega did state that "Hiring is my top priority. This might be a surprise, but I don't think that U.S. companies have better tech., and we started first." Which goes to show that Brazil is, in fact, a leading light in the freight gig economy.