Jeff Bezos’ investment in digital freight forwarding and supply chain finance firm Beacon is a personal one, the U.K. start-up’s CEO told CNBC Wednesday after the closing of its $15 million Series A funding round.
“I should be really clear that this investment is from Mr. Bezos directly. It’s a personal investment, not one made by Amazon. Amazon is aware and had to approve of it, but there is no commercial relationship and this has no direct tie with Amazon itself and it’s important to make that distinction,” Beacon CEO Fraser Robinson said.
The backing from Amazon CEO Bezos, who has invested in numerous start-ups, is set to be a major boost for the company in its stated mission to be a global leader in logistics and trade finance. Its investors also include former Google Chairman Eric Schmidt and Uber founders Travis Kalanick and Garrett Camp. Its current executives were previously in senior roles at Uber and Amazon.
Beacon, based in London and founded in 2018, wants to disrupt the global shipping industry by using A.I. to find the cheapest shipping routes while offering customers supply chain financing to help cashflow.
The freight forwarding industry, or how goods move from the manufacturer to market, is worth $1 trillion. Robinson sees Beacon’s role as meeting the need for the industry to become more digitized.
“We were surprised by how analogue the existing logistics industry is,” he said. “By automating and streaming and creating huge efficiencies within our own operating platform, that means we can provide a vastly superior service to our customers — with automated updates, superior route optimization, and the working capital to fulfil what we see as one of the greatest problems created by logistics, which is cashflow.”
Asked about the potential for established shipping giants like DHL and Maersk to use the same technology and sharpen the competition, Robinson said he expects the industry to digitize itself.
“It’s a trend that is already happening and has been going on for a couple years,” he said, but noted that “it’s much more difficult than people realize for large companies to retrofit technology and make themselves more efficient overnight. Typically they’re either buying technology or buying businesses to help them get there.”
“By starting with a technology focus first and foremost and being data centric, I think you have a better shot at a more holistic solution that’s more scalable and more effective,” Robinson said.
He also sees Uber Freight, Uber’s trucking arm for the shipping industry, as potentially a useful complement to Beacon’s wider business, rather than competition. That’s because the trucking operation is just one piece of the longer and more complex process of getting goods across land, sea and air to their final destinations. Uber last year announced it would invest $200 million and hire thousands of engineers to boost its freight platform.
“The truckload piece, the Uber Freight piece, is a component of what we do, and they can and will be a great partner for us as part of the solution we provide, but it’s fundamentally a very different business,” Robinson said.