The Bowery Capital team is embarking on a ten week journey to cover B2B Marketplaces. We are doing deep dives on various companies, interviewing founders and investors, and learning what it takes to build success in the B2B Marketplace arena. Below is a part of our content series focused on learning from the prior generation of winners. This week we focus on freight marketplace uShip. You can read all of the posts in the series by going here.
The idea for uShip first came to Matt Chasen as he was driving a half-empty moving truck from Seattle to Austin, and began to reflect on the amount of unused freight capacity driving alongside him, as well as the difficulties he had faced a few months prior while trying to ship a beloved family heirloom dresser cross-country. Thinking about how to solve for these two problems, Chasen was inspired to build a new type of freight marketplace which would eventually become uShip. Chasen first began building uShip while attending UT-Austin’s McCombs School of Business, where he met co-founders Jay Manickam and Mickey Milsap, and they officially launched the marketplace in 2004. As an online marketplace, uShip offers a win-win value proposition – shippers can profit from utilizing their excess space, while customers can benefit from uShip’s affordable prices.
Through uShip’s online platform, individuals and businesses can ship anything, from cars and freight to furniture and animals, locally or long distance, through a bidding structure that allows carriers of all kinds – trucking companies, small fleets, owner-operators, and even road trippers – to offer up their excess cargo capacity. uShip is known for competitive rates driven by their flexible pricing system, as well as their best-in-class assistance and tracking/confirmation options which provide visibility across the lifecycle of a shipment. According to uShip, their marketplace saves customers an average of 40-50% on shipping costs and helps prevent lost revenues from the timing/mismatch problems that lead up to 50% of commercial trucks to be underutilized while on the road.
uShip initially focused on the consumer market by establishing a partnership with eBay, and over time it has shifted to building out its commercial business in the full truckload and less-than-truckload sectors, two markets which are sized at $300B and $39B respectively. In 2010, uShip acquired Boxby, a Scotland-based courier exchange with a similar model in order to expand the company’s global presence. To date, uShip has raised $70MM in venture funding from Kleiner Perkins, DAG Ventures, Benchmark, and others; the marketplace’s most recent fundraise was a $25MM Series D round in 2017 led by global logistics company DB Schenker. Today, uShip employs over 200 employees, has surpassed $1B in gross sales, and has facilitated millions of deliveries across 138 countries.
In addition to uShip’s first-mover advantage, one key contributor to the marketplace’s success has been its strong partnerships with companies like DB Schenker and Ritchie Brothers, who have steered customers to uShip’s platform and have helped it stand out in a highly competitive freight environment. uShip has also been effective in employing a Minimum Viable Product approach, relying on customer feedback to iterate and improve over time, rather than waiting for a product/feature to be perfected before bringing it to market. The MVP model allows a marketplace to quickly understand customers’ needs and to make targeted, incremental improvements to drive platform adoption. uShip’s partnership approach and its iterative product development have led the company to become one of the largest freight transportation marketplaces in the world.
If you liked “B2B Marketplace History Lesson: uShip” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog. Look out for more content on B2B Marketplaces from us in the coming weeks.
Below we have compiled a list of metrics that could be relevant for most B2B marketplaces and hope that it serves as a framework for tracking KPIs for success.