SAN FRANCISCO (Reuters) - Venture capitalists have poured $18 million into a startup that is helping to digitize the long-haul trucking industry, the latest sign that Silicon Valley is eager to take a piece of a $700 billion-a-year sector that has long relied on pencil and paper.
San Francisco-based startup KeepTruckin said on Thursday it raised $18 million in a funding round led by Scale Venture Partners, alongside previous investors Index Ventures and GV, the venture arm of Alphabet Inc (GOOGL.O).
KeepTruckin joins a crowded and competitive field of young companies all vying for a place in the trucking industry. Startups including Convoy and Transfix, and ride-services behemoth Uber Technology Inc [UBER.UL], are all aiming to unseat traditional freight brokers.
Founded in 2013, KeepTruckin provides the software and hardware for truck drivers to keep digital logs of their hours driven. The startup makes money on a monthly software fee.
When the KeepTruckin hardware device is connected to the truck driver’s smartphone app, it creates a digital log of hours worked that cannot be edited.
For years, truck drivers logged their driving hours using pencil and paper, making their books virtually impossible to verify.
The industry has been forced to change after the U.S. Department of Transportation mandated commercial vehicle drivers begin using electronic devices to log their driving hours, ensuring they don’t exceed federally mandated limits intended to avoid fatigue and accidents.
“They are like cowboys. They don’t like being connected,” said Shoaib Makani, KeepTruckin chief executive and co-founder. “But there is real change once they have experience with it.”
More than 400,000 drivers have started to use the KeepTruckin smartphone app to log hours, the company said. There is major growth potential for the company with an estimated 3 million vehicles still without the required electronic logging devices.
KeepTruckin plans to expand its services next year to connect drivers with loads of freight.
Using its technology, KeepTruckin is working to collect more data such as the location of trucks, whether they are full or empty, and drivers’ availability to drive and safety record. That data could allow KeepTruckin to become something of a marketplace for freight and drivers, Makani said.
The latest round brings KeepTruckin’s total funding to $28 million. Makani declined to disclose the company’s valuation.
Reporting by Heather Somerville; Editing by Randy Fabi