By Zach Armstrong – Tech and Innovation Reporter
July 26, 2022, 02:53pm EDT
An Atlanta-based logistics startup is ending its bootstrapping era.
Carpool Logistics, an automotive logistics company based at the Atlanta Tech Village, has received a $2 million raise from Atlanta Ventures. Prior to the investment, the startup operated on $300,000 from the founding team.
CEO and co-founder Michael Malakhov chose to delay seeking outside capital until the startup tested its product in the market to gauge the need. Now, he says his company has been able to attain consistent customers and reach around $400,000 in monthly revenue.
Launched in 2021, the startup provides a platform that cuts costs and emissions of shipping vehicles to their destinations by bundling them. Carpool Logistics connects vehicle shippers with auto haulers that have available space on their trucks. It also aims to provide transparency to consumers with the condition and location of the ordered vehicles.
Funds from the investment will go toward software development and growing its staff. The startup has 18 employees and over 200 customers. It aims to double both those figures by the end of the year. The startup will also expand its office footprint within the Atlanta Tech Village to 600 square feet. Carpool Logistics currently works with car dealerships and auctions and plans to extend to car manufacturers and direct consumers.
Atlanta Ventures was interested in the company because customer feedback indicated consumers want a seamless and transparent process behind ordering cars, said A.T. Gimbel, a partner at the firm.
“This is a very fragmented market with little visibility and a lot of inefficiency, so bringing innovation to it can add a ton of value,” said Gimbel. “If you look at broader market tailwinds, people will buy more things online and want that quick, fast Amazon-like experience.”
Thanks to its legacy as a physical distribution hub and vibrant tech ecosystem, Atlanta is seen as a growing hub for supply chain innovation. Hyundai Motor Corp. and Rivian Automotive Inc. are both planning to build massive electric vehicle manufacturing plants, employing thousands of people. Those could provide partnership opportunities to Carpool Logistics as they reach to car manufacturers.
The investment comes at a turbulent time to raise capital. Investors are focusing on profitability rather than growth, leading to a resetting of company valuations which has led to a pull-back of investment from tech businesses. Those pressures have led companies to constrain cash spending, often through layoffs. Marketing tech startup Terminus and Sonar Software laid off employees earlier this year.
“Some companies build a product and keep testing it, we built a service first and had repeat revenue before a product,” said Malakhov. “It helps when there’s a downturn if you have a path to revenue and your bottom line isn’t completely bleeding.”
Malakhov held various leadership roles in supply chain logistics before Carpool Logistics. He worked as a sales associate up to a Regional General Manager at the logistics platform C.H. Robinson and was the executive vice president at automotive logistics as a service platform ACERTUS.
Check out the original article here.