Welcoming MVMNT to the Equal Ventures Portfolio

We’re proud to announce our investment in MVMNT, a platform to democratize access to software for freight shippers and brokers, and to congratulate them on their $20m Series A with A16Z

One of our core insights at Equal is the revealed low willingness to pay for software by non-digitally native industry buyers, despite incredible ROI. We’ve seen time and time again that a healthy value proposition simply isn’t enough to convince customers, especially at the long-tail of the market where they lack the budget, cashflow and technology acumen, to invest in digital transformation. One of our prevailing approaches to these conditions is to offer a core system on a freemium basis and to identify an alternative means of monetization that attacks other cost centers, stealing wallet share from other analog service providers, rather than increasing their existing (IT) costs.

We believe supply chain represents one of the most appropriate markets for this model. Technology adoption is generally low but is acutely felt at the long-tail of the industry (where the vast majority of the market exists). This is especially true in the freight market where we see ~$600B of freight spend (out of a total of $800B) that fails to move through software systems. Yes, $600B… Legacy freight brokers and shippers are forced to pick from legacy application solutions like McLeod and Mercurygate, but, more often than not, they actually move tens of millions of freight with no software system at all. As we spoke to one customer in this space spending >$20m on freight per year, they said “There’s no way my boss would ever let me pay $20k for some fancy software.” In addition to a low willingness to pay for software, historical barriers to TMS adoption include perception of the high investment / deployment costs, difficulty of integration, learning curve of new systems, and a failure to understand ROI — existing processes seem “good enough.”

Our team felt we identified an opportunity to provide a Freemium Transportation Management System (TMS) to the market, monetizing not by charging customers but through various transactional and financial services that these customers were already paying for. The freemium model can provide an especially powerful counter-positioning to existing legacy and tech-enabled TMSes in the market. Enterprise-focused TMSes are not incentivized to pursue the SMB segment given their low willingness-to-pay, which does not justify the cost of sales & integration resources. SMB-focused TMSes are battling low SaaS ACVs and focused on the uphill road of upselling additional modules. We believed strongly that there was an opportunity for a platform to circumvent the perceived price, integration, and learning curve obstacles by offering a free, easy-to-use procurement tool, with minimum integration, that shippers and brokers can use right away to bid out and manage loads to their broker / carrier network.

With that, we’re incredibly excited to announce our investment in MVMNT. MVMNT offers a freemium TMS for the long tail of shippers and brokers, who use the platform to procure, manage and oversee their freight. MVMNT monetizes through fintech products such as financing (QuickPay), insurance, and payments. These products not only enable MVMNT to make its offering free to its customers, but also improve working capital, transactability and risk management for MVMNT customers and their stakeholders (win-win-win!).

We first met Mike (the Founder/CEO) and MVMNT back in April, when they were primarily a digital freight broker. We mentioned our thesis on “Freemium TMS” to him and he leaned in on testing it. In the next 6 months, we saw the business grow by more than 10x. He then started to test QuickPay with drivers via the platform in the fall and the adoption was simply fantastic. We ultimately had the opportunity to get to know Mike over a period of roughly 6 months before investing and we’re incredibly thankful that we were able to do so. We got the chance to see his intensity, his decision making and his maturity as a team leader — not during a single pitch, but through a progression of our interactions. We also got the chance to learn about him as a person (including that he was the #1 ranked World of Warcraft player in the world) and to see what gives him the drive he has. All this gave us the confidence that he was the type of founder we would want to partner with him, ultimately leading a previously unannounced $3.8m seed round with participation from Abstract Ventures, Dash Fund, and M25 Ventures in December.

Today, MVMNT is announcing a $20m Series A led by Seema Amble and Joe Schmidt at A16Z. This round will enable MVMNT to accelerate its plans to power the long-tail of the shipping and brokerage industries with enterprise-quality software and financial services. We’re excited to welcome Seema, Joe and the A16Z partnership to the MVMNT team and we’re confident they will be amazing partners in our mission. You can read more on TechCrunch here.

With that, please join us in welcoming MVMNT to the Equal family and congratulating them on the round. If you are interested in joining for what will surely be an incredible ride, please consider applying for one of MVMNT’s available roles!

P.S. — To learn more about the Equal thesis, please check out the redacted version of our “Prepared Mind” research memo here.

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