Uber (NYSE: UBER) announced Wednesday morning that it has agreed to sell the European portion of its freight business to Sender, a Berlin-based digital freight brokerage.
In June, sender acquired Everroad, its French competitor, bringing it to six locations and 350 employees. In July, the sender struck a partnership deal with Poste Italiane to manage the Italian Postal Service’s €100 million full truckload spend.
The all-stock deal, which is reportedly worth less than $1.1 billion, gives Uber a stake in Al-Marsal. The broad outlines of the separation are consistent with Uber’s approach of divesting business divisions in markets where it has failed to establish a leadership position or path to profitability. In January, Uber sold Uber Eats India to Zomato for shares. Earlier this summer, it was reported that Uber Rides was considering exiting its joint venture with Yandex, a Russian ride-sharing company.
Uber Freight will now refer customers looking for logistics services in Europe to the sender, while the sender will do the same for its customers who need to move goods in North America.
“Uber Freight Europe operates operations across Europe with a focus on the Netherlands, Germany and France,” David Notaker, CEO of the dispatcher, said in an email. “We share a strong focus on enterprise customers, who will now be targeted together. Together, we have the strongest customer base among all digital freight forwarders in Europe and manage more than 50,000 loads per month.
Uber Freight Europe is headquartered in Amsterdam and operates primarily in the Netherlands, Germany and France with a team of around 150 employees, although it also transports freight across the European Union. The idea was to connect Poland’s leading small transport companies with the German economy and Europe’s largest port in Rotterdam, the Netherlands. Uber Freight expands into Europe at the request of Heineken.
“It was a strategic decision to join forces to serve the industry and our customers with the best products and services possible,” Notacre said. “Both companies are technology-driven and there is significant service overlap. Through the acquisition, we have established a local presence in the Netherlands with a strong team and operations.”
“We are proud of the incredible growth and success our Uber Freight team has been able to achieve in Europe,” said Lior Ron, President of Uber Freight. “This collaboration with sender allows us to expand our reach in Europe while doubling our Uber Freight business in North America, and jointly moving the digital freight industry forward.”
In January, Uber appointed Tom Christenson, a veteran Amazon employee, as general manager of Uber Freight in Europe. At the time, before the shipper’s acquisition of Everroad and the joint venture with Poste Italiane, Christenson said no player had more than a single-digit market share in Europe’s freight brokerage industry.
“The (Sender) team has been building, iterating and scaling the core technology,” said Barry Large, a partner at Dynamo Ventures, the supply chain-focused venture capital firm that invested in Sender’s 2017 seed round alongside Scania. Senior sat on the dispatcher’s panel until last year.
“The TMS a dispatcher operates is tailored to its culture, customer-focused operations, and the needs of both shippers and carriers. “The dispatcher identified in 2018 that over time, many routine roles can be improved and further automated to increase revenue per person,” Large continued. “In addition, in the EU market, double brokerage is not uncommon and is a symptom of a lack of transparency of supply. Dispatcher has built systems to simplify the management of carriers so that they have a consistent, high-quality base of drivers. On the shippers side, as in the US, workflow simplification and shipping transparency are key, and the shipper here continues to focus on growing its technological advantages.
One freight manager at Uber said it faced challenges adapting its owner-operator-focused technology platform and business model to the European trucking industry, which is much less fragmented than in the United States. At the time of the deal with the sender, Uber Freight Europe was transporting approximately 150 loads per day and losing ground to the sender. (After this story was published, an Uber Freight spokesperson questioned the characterization of Uber Freight’s technology and said Uber Freight’s fleet management tool was working well across Europe at the time of the acquisition.)
Earlier this summer, reports that Uber was seeking investors for Uber Freight and possibly a subsidiary surfaced in the media when an email from Uber CEO Dara Khosrowshahi was leaked indicating “really tough choices” regarding the business units. Unprofitable.
“The words were misinterpreted,” Bill Dreggert, Uber Freight’s co-founder and chief operating officer, told FreightWaves at the time. Uber Freight “remains 100%, full steam,” and the company has continued to build products and serve all customers, with the goal of “simplifying transportation and building a platform for all types of transportation,” he said.
Uber Freight’s growth has slowed significantly as the parent company has become more focused on unit economics and EBITDA profitability. Adjusted net revenue — a vague term roughly equivalent to what most freight brokerage firms consider gross revenue — was $218 million in the third quarter of 2019 and then rose to $219 million in the fourth quarter. In the first quarter of 2020, freight revenue fell to $199 million before rebounding to $211 million in the second quarter.
Vishnu Rajmanikam contributed to this story.
