TrueNorth has raised $50 million from Sam Altman and others to empower independent truckers

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Jin Stage studied aerospace engineering at MIT, but when she found herself at Scotty Labs, an SRI International spin-out focused on autonomous driving, she says she appreciated that the technology was widely adopted. How far is it from

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Indeed, when Scooty was acquired by DoorDash in the summer of 2019, it teamed up with Sanjay Wijratnebat, a collaborator and . Senior Software Engineer at Scotty Labs, and he got to work on an issue that was close to his heart anyway: empowering truck drivers.

Stage’s grandparents were owner operators, who acquired up to six trucks in the 1980s; She says that her uncle and cousin also got into the business. With her insight, she knew not only the daily hardships that independent truck drivers go through, but she knew the predictions made by AI experts who said truckers would be out of work. by 2027 The flats were wrong. “If you think about what long-distance truckers do,” Stage says, “they go up the Rockies, they have to haul freight in the back of their trucks, often without cell service for hours at a time. Live — it’s really hard to automate that kind of environment.”

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Stage also knew that the market it was chasing was huge – even though plenty of startups were already coming up to address various aspects of the trucking industry, from brokers and load marketplaces to such to organizations that help with cash flow; From equipment manufacturers to accountants to insurance providers and compliance products.

In fact, the opportunity that Stage and Wijeratne but spied with their startups, true North, had to create a platform that does all this. Its idea was to help truckers manage their customers; Find, book and coordinate loads; optimization of their routes; Invoice your customers; and collect payment. It will also pay them upon completion of the job, so drivers will not be forced to wait a month or more for payment, as has been customary for a long time.

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Broadly, the idea was for TrueNorth to give independent truck drivers who make somewhere between 10% and 20% of the industry the resources of a larger fleet – and better economics.

Y Combinator liked the pitch enough to welcome Stage and Wijeratne, but in its winter 2020 batch. A seed check from Sam Altman quickly followed, then an $8.5 million Series A round led by former Stripe exec Lachey Groom.

Now, Stage is announcing, the company has raised $50 million in Series B funding co-led by Groom and Altman (along with brothers Max and Jack). Flexport Fund, Tribe Capital, Original Capital, K5 Global, 137 Ventures and Fifth Down Capital among many others have also joined the ride.

TrueNorth has raised $61.8 million in total to date.

The question now is whether TrueNorth, which already employs 50 people – half of whom are women, in particular – can deliver on its promises.

Of course, the $50 million should help with $10 million in working capital, which TrueNorth has secured separately from a loan provider. It is already using that money to ensure that its customers are paid promptly after each task.

The company is already reducing costs for about 200 truck drivers using its software, Stage says. She says the only way it can do this is by gathering its customers together and securing low-cost insurance for the group. (“An independent trucker who would actually pay $20,000 to $30,000 a year in insurance on his own, which is insane,” says Stage. “With us, they pay $10,000 a year.”)

TrueNorth also says it increases drivers’ revenue by helping them find the highest paying trucking jobs and making them easier to book.

Still, an outstanding question is how does True North reach its customers effectively, given that it’s targeting a very fragmented market. Stage notes that the company has “never made outbound sales” because all of its customers have found the company on their own, and she says 90% have additionally referred friends. With rivals with deep pockets, it may need to spin a more aggressive marketing strategy.

Those deep pocket rivals can also prove problematic. Interestingly, TrueNorth’s most direct competitor may be Cloudtrux, which just two weeks ago closed on $115 million in Series B funding and whose founder Tobena Arrodiogbu previously cofounded Scotty Labs.

Arrodiogbu’s vision is also to help trucking entrepreneurs operate their businesses. As he told Nerdshala in late November, “There’s a lot of equipment being built for brokers and shippers, but not nearly enough is being made for the truck driver who’s working really, really hard.”

For its part, Stage sees such momentum as a strong sign for truck drivers and investors. “We serve the same customers who are independent truckers, [but] I think it’s good to be honest,” she says. “It’s a huge market. It’s a $100 billion market, just these independent truck drivers and small fleets. So the more people who are helping the owner operate the operations and who are doing the marketing and brand awareness, the better.” “

Meanwhile, Stage is hiring fast, and revenue is starting to add up for the young company, which charges customers between 15% and 18% of all the goods they move. (If that sounds high, Stage says that large fleets often take closer to 40%.) Right now, those drivers are distributing between $30,000 and $50,000 a year per truck, which is more than True North’s gross revenue. puts it between $6 million and $10 million. But that’s 3.4 times in the past six months alone, Stage says, and the company is still operating mostly in its first market, Dallas, and more new ones in Atlanta.

More important to that, Stage says: The company is significantly improving its contribution margin, which is basically the portion of sales that help offset its fixed costs. “It doesn’t matter if you’re going really fast if there’s a leaky bucket in there,” says Stage, who can speak to one of his trucking customers.

“You want to know that you’re building a business that runs, and we’ve been very efficient with our money.”

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