- The European Investment Bank will provide €25 million in venture debt financing for German logistics technology start-up InstaFreight.
- The company's data-driven approach supports the European Union's climate and digital transformation goals in B2B logistics.
The European Investment Bank (EIB) is supporting logistics technology start-up InstaFreight with €25 million in venture debt financing. The Berlin-based company connects medium and large shippers with smaller carriers across Europe with the aim of reducing empty truck runs and creating an efficient and sustainable European market for land transport. With its combination of innovative international transport management solutions and highly digital freight forwarding services, InstaFreight also reduces small and medium shippers’ dependency on large logistics providers.
The EIB`s financing will support the company in growing its European client base, hiring new staff and advancing its digital approach to supporting green logistics. The financing is backed by the European Guarantee Fund (EGF) set up by 22 EU Member States to reduce the economic impact of COVID-19. The EGF’s venture debt product enables the EIB to address a quasi-equity gap linked to structural market failures across the European Union.
The financing round is led by the investment company Heliad. All previous investors in InstaFreight participated in the new financing round that closed at $40 million.
Despite the pandemic, the European road freight market has continued to grow. The transport market is still lagging behind in digitalisation. With offices in Berlin and Wroclaw, InstaFreight acts as a fully-fledged logistics provider, not a mere platform. The company is a direct counterparty for medium and large customer-side shippers like Amazon, Coca Cola and Siemens, and works with a large network of over 25 000 carriers for deliveries.
In addition, it utilises its platform to offer shipping clients the option of outsourcing their freight logistics using a fee-based transport management/4PL (fourth party logistics) business model. Today, InstaFreight is the only digital player in Europe combining freight forwarding and transport management.
The logistics industry has a profound impact on greenhouse gas emissions. Trucks alone are emitting more than 200 million metric tonnes of CO2 on European roads each year. It would take 4 billion trees, a forest the size of Germany, to absorb these CO2 emissions. Most of the logistics industry is still offline with email and telephone being the major channels for coordination. Truck-forwarding companies are small, running only six trucks on average. The results are 40% empty runs, a lack of operational transparency and high costs due to inefficiency.
EIB Vice President Ambroise Fayolle said: “Transport is still a major obstacle to reaching our climate goals. Moreover, the pandemic exposed how vulnerable our trade networks and supply chains are. That's why we are glad to support young and fast-growing companies such as InstaFreight. Their creativity and logistics technology can help to accelerate our digital and green transformation and make European transport more resilient.”
InstaFreight co-founder Philipp Ortwein added: “The current situation in logistics shows us that reliable supply chains are not just a matter of course, but essential for our economy as well as our society. With the expansion of our innovative tech solutions, we want to become one of the leading companies that make logistics more sustainable and more efficient and thus guarantee the future stability and security of inner-European land transport. We are proud that the EIB is supporting us on this mission.”
Background information
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from 22 EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and its subsidiary, the European investment Fund (EIF), to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available, mostly to small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost the worst-hit parts of the EU economy.
Heliad is a listed investment company with a mission to empower both entrepreneurs and investors. The company invests in market-leading companies across various verticals and regions to power their next phase of growth. As a listed company and through its strong team and strategic partners, Heliad can support companies pre, at and post IPO and act as a gateway to public equity capital markets.
InstaFreight is a leading digital logistics company for overland transport in Europe. Founded in 2016, the company employs more than 200 people across Europe and carries out several thousand transport operations per week. InstaFreight combines the transport capacity of more than 25 000 carriers in one digital platform and gives shippers access to this capacity. Through digital innovation, the Berlin-based scale-up creates transparency and efficiency within the transport process.
For shippers, InstaFreight handles transport reliably and without complications. By digitalising the transport process, shippers benefit from efficient processes that save time and money, and a supply chain that is always visible. With InstaFreight, carriers can meet the digital needs of shippers and optimise their capacity utilisation, and are also paid faster at attractive freight rates.
