Qargo secures $33m Series B to modernise transport without acting like a typical startup

Transport companies have long known their software is holding them back. Most still rely on on-premise systems, are at risk of cyber attacks and are grappling with endless manual tasks. Despite the frustration, operators in legacy industries tend to trust what they know. 

According to Qargo co-founder and CEO Adriaan Coppens, many of their transport company customers view startups as risky — they think they grow too quickly and fear they won’t be around for long, leaving them stranded when the business goes bankrupt.

So rather than trying to pull the industry into the startup world, Qargo (pronounced ‘cargo’) has adapted to incumbent ways, even in the way it is raising capital.

The company’s $33m Series B is led by Sofina, a Belgian family-backed investment firm with a profile that mirrors the multi-generational ownership of many transport operators. 

Coppens says the familiar structure has helped win trust among customers who might otherwise hesitate to move their operations onto a young, cloud-native platform. It also helps that Sofina is a listed Belgian company. It’s not going anywhere. 

Qargo’s biggest market is the UK, but with three Belgian founders it also operates in Belgium. It is also currently live in the Netherlands, Ireland and France and plans to expand further across Europe and into the US with the fresh capital.

In the US, competitor TrueNorth has raised $61.8m with backing from Sam Altman and Y Combinator while Alvys secured a $40m Series B led by RTP Global two months ago.

Alongside plans for expansion, the company is putting much of the new funding into beefing up support and account management, a direct response to customers fears that growth will mean weaker service.

Qargo has now raised a total of $54m, and its previous backer Balderton Capital joined this round again, which came earlier than expected due to interest from Sofina and, according to Coppens, means the startup probably won’t raise again for another few years.

Timing has also worked in Qargo’s favour. 

“It has been well established that the transport industry is not doing very well and that everybody needs to differentiate and offer a better customer experience,” Coppens tells Pathfounders. 

They look to differentiate themselves — quickly — and realise their technology is something they can upgrade easily to work more efficiently, communicate better with drivers and customers and automate a lot of the traditionally cumbersome workflow. 

“We then came at the right time there with the right product, which has really helped us,” he says.

Because cloud tools can be deployed quickly, Qargo found itself in the sweet spot: a modern system ready at the exact moment the market was willing to consider switching. 

Qargo automates much of the transport workflow, from order creation to route planning, invoicing and warehouse time-slot booking. Customers say they spend up to 75% less time on repetitive admin and their total mileage is reduced by 6-10%, which in turn means 6-10% less pollution.

The environmental benefit that comes from more efficient routes is framed as a secondary bonus, but is a big part of the reason Coppens wanted to found Qargo in the first place. 

A serial entrepreneur who previously built hotel software provider Lighthouse, which became a unicorn last year, he knew he wanted his next venture to have a climate focus. He explored various avenues — “Agriculture, I don't know anything about. Electricity production, I know even less about” — and his “aha!” moment came when he thought about transportation, having started his career as a financial advisor at the Belgian National Railways.

“I basically started looking for the worst software that transport companies used,” he says. “That's how I ended up with the transport management systems. And everybody who I spoke to said it was a really bad idea that nobody would ever replace that system. That we had too much to build. Optimistic and naive that I am, I decided to ignore all of them to then discover that it is quite hard to build and you need a lot of functionality. And in the beginning it's very difficult to convince customers to switch.”

As they managed to onboard more customers and prove use, resistance lessened, but Qargo was aided by a series of cybersecurity scares across the industry, which pushed operators away from vulnerable on-site setups and towards cloud platforms. Qargo, hosted on Google Cloud, didn’t have to retrofit modern security onto legacy infrastructure.

Qargo’s first few years show what can happen when a startup meets a legacy industry where it already is. But transport is a long-game market: habits don’t disappear overnight, and neither do scepticisms. As the startup pushes further into Europe and the US, it’ll have to keep navigating both.

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