David Notacre has had a busy summer making deals. He heads Sender, a digital shipping company that connects different parts of the logistics process, from shippers to carriers, and the startup has significantly expanded its reach this year.
In June, the Berlin-based company merged with French rival Everod, entering into a €100 million joint venture with the Italian postal service, Poste Italiane.
Most notably in September, it acquired Uber’s European shipping business in an all stock deal — no terms were disclosed — and Uber became a shareholder in the company.
Uber Freight has made inroads in Europe — it just launched in Germany just over a year ago in July 2019 — and has counted some big names among its customer base like Nestle and LG, but its vision for Europe hasn’t quite matched the US. .
While Uber Freight decided to sell its European operations, a few weeks later the Uber unit raised $500 million from investors to capture other markets. This has left Cender in a prime position to become the dominant player in Europe.
For Nothacker, the sale to Sender was driven by the key differences between US and European shipping companies, which the industry would see as “continental champions”.
“If you look at sea and air freight, we will see global champions, transporting a container from China to Europe or China to the United States,” he said.
“In ground freight, every continent is very different, which seems ridiculous because the problem we’re trying to solve is in principle the same thing that Uber Freight is trying to solve.”
The American model and approach cannot be applied to Europe because the typical profile of trucking companies is different in Europe, according to Nothacker, with the United States having many large owners and operators while Europe has many small fleet owners.
“The best thing to conquer Europe is to have a company that can invest significant resources in developing a solution for Europe,” Nothacker said.
“Everyone is trying to connect the supply and demand side but the markets are so different that each market needs a different approach, especially a different technology stack.”
Nothacker added that the deal is not just a case of acquiring a customer base. He said that the two sides will work to cooperate in developing new technology standards and APIs to address the lack of standardization in the shipping industry.
Digital transformation
This is just one push in Sender’s broader mission to serve European shipping more effectively using technology, something Nothacker said has been missing in the industry for some time.
Sennder has raised more than $100 million since its founding in 2015 with backers such as Accel, Lakestar and truck manufacturer Scania.
But the mission wasn’t always clear as the company bounced around different ideas early on like same-day package delivery.
“We have tried to offer same-day parcel delivery across regions by combining empty capacities on buses with last-mile and first-mile,” Notacre explained.
“The hypothesis at the time was that Amazon, Zalando and a third company from Germany Notebooksbilliger were just starting to offer same-day package delivery,” he said.
“We thought that smaller e-commerce companies should also have an opportunity to do this,” but the idea of adoption was small and has since matured into a much larger vision that addresses shipping at scale. Industry with digital solution.
The lack of digitalization in shipping is due to the fragmented nature of shipping in Europe with most markets still thinking very locally, Nothacker said. As a result, the industry has become a patchwork of operators and subcontractors.
“There are multiple reasons why it makes sense to break this very complex thing through subcontracting — where everyone knows everyone — into smaller parts because they run these smaller units more efficiently than a big machine.”
Sender and the likes of US rivals Flexport and PayCargo, which raised $35 million last month, are trying to weave these fragmented pieces together, but expansion will be a tough road to navigate in Europe.
Sennder has offices in seven markets because Nothacker said the company still needs to have operations on the ground to establish local relationships and attract customers to its digital routes. The team has grown to 550 now.
With its latest M&A deals, the company is looking to expand further through acquisitions with a particular focus on Eastern Europe and eventually Russia.
It will soon return to investors to raise its next round, expected to reach €100 million, in order to fund this growth and the shopping spree will play a key role in this strategy.
“Going forward, we want to do other mergers and acquisitions that we had to stop. We had a couple of deals in the pipeline that we had to stop because of the acquisition of Everroad and Uber Freight, which is the acquisition of small, family-owned brokerage firms,” Notacre said.
“A lot of these companies have 20 to 100 employees, which is usually too big for a neighbor to take over when the owner wants to retire, and too small for private equity.”
