4 min read
To learn more about how to build a startup in an unfamiliar industry, check out our video from the event, and see if you qualify for membership to join Founders Network.
When they decided to launch a fintech startup in the freight and logistics industry, Bharath Krishnamoorthy and his best friend and business partner Shawn Vo were first-time founders with experience in finance and law.
“At the time, a truck to me was just this thing you get stuck behind in traffic,” says Bharath. “I quickly learned trucks were only one small part of a large supply chain that involved several parties.”
Bharath and Shawn took passenger trains and intercity buses to visit each other in Washington, D.C. and New York. That’s when they became interested in how the economy moves people and goods. Dissatisfied with their day jobs, Bharath and Shawn quit their careers in M&A law and finance respectively to develop a platform to streamline the transportation industry.
A few years and a few iterations later, Bharath and Shawn launched Denim, a freight payments system for SmartBrokers. Denim’s platform offers an ecosystem of easy-to-use financing, payment, and automation tools.
In 2022, Bharath wrapped up the Series B funding round for Denim. The company raised $26 million in equity capital and $100 million in debt financing to fuel growth. Now, Denim is doing more than $15 million in payments each month.
In his global keynote for Founders Network on May 16, Bharath will share insights from his experience using fintech to innovate the entrenched freight and logistics industry.
Logistics 101
When logistics piqued their interest as a business subject, Bharath and Shawn started researching. Bharath started his career as an attorney, so he read the relevant case law. The pair also read as much as possible about the freight and logistics industry and talked to experts.
Bharath recalls cold messaging tech founders, freight brokers and other leaders in the industry on LinkedIn. Most people never responded, but the few who did were extremely helpful and willing to share their wisdom.
“The 5-10% of people that did respond were surprisingly generous with their time and thoughts.They had built a successful career in this space and really wanted to give back,” says Bharath.
Freight Newcomers
The pair was at an obvious disadvantage, compared to industry leaders who had worked in logistics their entire lives and those who had been in the freight and logistics industry for generations. But, in a field with a long history, the pair used their fresh eyes to their advantage.
“There is a disadvantage there,” says Bharath, in reference to the pair’s newcomer status. “I think there’s also a really big advantage. If you grow up in an industry, it’s hard to tell if things are a certain way because that’s the way they must be or because that’s the way they’ve historically been.”
In fact, some industry leaders directly told the pair not to work with freight brokers. “They’re going to rob you,” industry veterans warned. But the reasons they gave didn’t make much sense, Bharath and Shawn thought.
“We haven’t lost a penny in over a year and a half. That’s the kind of bet that is actually a lot easier to make if you don’t have 50 years of experience in an industry, because you’re willing to look at things differently,” he says.
The Future of Logistics Technology
Logistics technology is a relatively new space, and not just for Bharath and Shawn.
Only in the last decade did companies like Uber Freight start building software for players in the industry. But, now that the first wave of investment proved to be successful, venture capitalists have realized that there’s money to be made in logistics tech.
“Overall, I’m really bullish about what’s happening in this space,’ says Bharath. “I do think there’s going to be a lot more investment in logistics technology in the next five to 10 years.”
For Denim, specifically, Bharath and Shawn will be spending the next two years growing the core business and expanding Denim’s product suite. Bharath envisions adding to the products Denim offers to clients as well as building analytic services powered by the data that Denim collects.
In the webinar, Bharath will discuss:
- Picking a co-founder
- Pivoting till your strike gold
- Managing investors & teams through a pivot
- Stretching the runway
- Playing the meta-game right
To learn more about how to build a startup in an unfamiliar industry, check out our video from the event, and see if you qualify for membership to join Founders Network.
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