Canadian startup Rose Rocket lifts Series A to grow transportation software business – TechCrunch

Rose Rocket, focused on freight transportation, recently raised $ 25 million.

The Toronto-based startup is calling the round a Series A, with Addition Capital and Shine Capital leading the deal.

By-company data aggregated by Carta, the average logistics-themed Series A rounds since early 2020 have seen median fundraising of $ 8 million and post-money valuations of around $ 50 million. dollars. The Rose Rocket cycle is certainly above its sectoral median in dollars, and we assume it is also measured by valuation.

But the silver side of Rose Rocket’s story isn’t the most interesting thing about the company. Its market is.

The startup is built in the TMS space. What is a TMS? A good question, and one I must have asked while digging into Rose Rocket. TMS stands for transport management software, which you can think of as a wide range of products that help truckers, brokers and others in the freight industry do their jobs on a digital basis.

Or, as Rose Rocket co-founder and CEO Justin Sky explained to TechCrunch in an interview, TMS is a somewhat generic nickname that one might compare to ERP (enterprise resource planning). Sky added that he often describes what Rose Rocket builds as a NetSuite for trucking companies.

The startup’s trick is, in Sky’s formulation, to go “horizontally within a vertical”. By this, the CEO means that Rose Rocket wants to coordinate more than just one part of the larger freight trucking landscape; instead, the company wants to coordinate all players, allowing for a more integrated and less chaotic market.

For example, Rose Rocket offers the same software to freight brokers and trucking companies. If a freight broker sends work to a trucking company and both use the startup’s software, Sky said the job can look like each company is reading the same score. Instead, say, one party played a Chopin Nocturne while the other played a free jazz solo.

Like many vertically themed software games, Rose Rocket is tackling other market-driven software vendors, but also customer use of Excel and manual processes. Trucking as an industry, you won’t be totally shocked to learn, isn’t precisely fully still digitized. This could provide a large Total Addressable Market (TAM) for Rose Rocket, given the importance of trucking as a business (and employer).

The results so far look promising, with the company claiming that the number of customer logos has increased roughly 9-fold in the past year. Of course, the number of logos is far from GAAP, but the volume of transactions under contract has also increased 9-fold during the same period.

The fact that Rose Rocket is a Canadian company – even though it is incorporated in the United States, essentially a requirement to raise funds in North America – is remarkable. The Canadian startup market has come a long way since Shopify burst into the wider business consciousness. We should probably pay more attention to it.

According to data from CB Insights, Canadian startups have raised some $ 9.3 billion so far in 2021, through the end of the third quarter. This figure is higher than what the country’s nascent tech companies managed in 2019 and 2020 combined. The country is also on track to achieve a record number of low-key investment rounds this year. Rose Rocket is therefore part of a growing trend of larger and more frequent start-up investments in the country.

Not when someone pours the inevitable $ 100 million on Rose Rocket’s head.