Freightos IPO Filings Show Platforms’ Place in Logistics’ Digital Transformation

Embedded payments and the digitization of the supply chain are coming to a public market near you.

There has been no dearth of headlines heralding the end of Wall Street’s love affair with special purpose acquisition companies (SPACs).

But there are still signs of activity in the space, where platforms are gaining attention and have opted to go public by merging with a SPAC.

As reported, freight booking and payment platform Freightos Group will go public through a merger with special purpose acquisition corporation (SPAC) Gesher Acquisition.

The emergence of platforms has been a hallmark of commerce across all verticals. We might liken the digital shift to one that takes its cue from Amazon, Uber and from Expedia, too. In other words, matching supply and demand, ideally, should be simple and intuitive, with a few clicks.

Management at Freightos previously said that $22 trillion of goods had crossed borders, as measured last year. But of course, there have been some significant supply chain snarls bedeviling inventory movement in a key part of the global economy that is still paper-based and inefficient and marked by friction.

Read Also: Israeli Freight Platform Freightos to Go Public Via SPAC

Freightos stated in the announcement that it works with more than 10,000 importing and exporting companies, 3,500 freight forwarders and 200 carriers — executing in aggregate “hundreds of thousands” of international freight bookings every year.

Dig a bit deeper into Freightos’ own filings, and the third-party logistics segment represents a $1.8 trillion opportunity, looking just a few years out to 2026. The gross booking value, projected for 2023, could be worth about $1.7 billion.

As for the inefficiencies, the company said in the filing that more than two hours are spent managing each individual shipment, which in turn involves more than 30 people per shipment.

Freightos, the company has said, exists as a marketplace serving end customers in a manner similar to Booking.com. Slides in the presentation show that 35% of air cargo capacity is digitized and 41% of ocean capacity is in process of digitization.

The matching of buying and selling, the firm said, leverages 3 billion data points. The company’s financials show that total revenues of $16.6 million are on pace to grow to $21.1 million in 2022 — and an estimated $39.5 million next year.

A recent interview with PYMNTS shows that application programming interfaces (APIs) have a place in transforming freight and logistics.

Freightos executive Ruthie Amaru told PYMNTS’ Karen Webster in an August 2021 interview that her company made significant investments in intellectual property to create a secure, compliant billing system companies can put to work throughout the freight lifecycle.

“If you’re going to identify a manufacturer somewhere in the world, and you don’t know how much it costs to ship their goods to you, that’s a lot of uncertainty,” Amaru added. “So, plugging in our platform, which provides certainty on freight, gives you a guaranteed price. The ability to know that you can actually ship it, plugged into the ability to find and source manufacturers around the world, suddenly it gets to be very powerful.”