Why We Invested In Loadsmart’s $90M Series C: Richard Perry of PFMO4
Loadsmart announced a $90 million round in mid-November led by BlackRock, Inc.’s managed funds and included prominent strategic investors from the transportation space such as TFI International Inc. (NYSE and TSX: TFII), a North American leader in the transportation and logistics industry, and Maersk, the world’s leading ocean carrier and a Loadsmart investor since Series A.
The two questions you receive more than any others when you raise $90M are: why did they invest and what are you going to do with the money?
Our investors speak for themselves so we thought we’d let them do just that. We talked to Sune Stilling, Head of Growth at Maersk, Richard Perry, Founder at FPMO4, William Abecassis, Head of Innovation Capital at Blackrock, and Andy Boyd, Founder at Bramalea Partners to discuss why they participated in the round and what they’re most excited to see Loadsmart accomplish with their investment.
Richard Perry, Founder at PFMO4
Richard: My first job at Goldman Sachs was being an over-the-counter trader, making markets. As soon as I heard Ricardo talk about this I said you’re not a broker you’re a market maker. He knew exactly what I was talking about and goes that’s exactly what we are.
Aaron: Was there anything specifically looking back on the whole process that stuck with you?
Richard: The real revelation point for me was when I realized they were creating an algorithm that made them a principal rather than a broker. There are lots of people who can be brokers and there are lots of people who can execute orders and follow recipes. There are very few people who can actually take principal risk and be successful at it and have a formula that can proove you can do it year in and year out.
Aaron: What are some of the implications of taking on the risk yourself?
Richard: They think like principals, they don’t think like brokers. So to think like a principal you’ve got your own money on the line. It’s not X, Y, Z corporation largest shipper in the world’s balance sheet you’re playing with, it’s your money. Every single time you’re making an offer to a shipper for what you will provide them with that truck for and carry out a delivery, that’s your risk. And so when it’s your risk you take it a lot more seriously and you have to know your product a lot better than when it’s other people’s money. There are very few people who can do that for a long period of time, but there’s some, and I think Loadsmart—they are those people.
Aaron: What are you most excited about seeing Loadsmart accomplish over the next several years?
Richard: That almost everyone realizes that this is the way to do business—the Loadsmart way. I’m really looking forward to people saying it’s just much more efficient, I don’t need to run a shipping process the way I did historically. And then there’s a lot of consolidation in this middleman world and there will be survivors that will be judged and get a report card every single day with how they did. And if they did poorly they’re going to get fired by either the shipper or the trucker. If they do well there will be a very healthy business that will have been created for the shipper, the trucker, and the person in the middle, which I believe will be Loadsmart.
See all the interviews with leaders at A.P. Moller – Maersk, BlackRock, PFMO4, and Bramalea Partners here. Our funding announcement was also covered in the Wall Street Journal, FreightWaves, TechCrunch, and VentureBeat, among others.