SAO PAULO: US investment bank Goldman Sachs has led a second round of investment to inject around 35 million reais ($11 million) into Brazilian technology startup CargoX, in a sign of investor confidence despite the deepest recession in decades.
The Brazilian logistics firm is using mobile technology to connect companies that need freight services to more than 100,000 independent truck drivers.
CargoX began to operate last March and expects 50 million reais ($15.4 million) in revenue in the first year.
CargoX's chief executive, Federico Vega, a former JPMorgan Chase & Co executive, said that around 40 percent of truck trips in Brazil are made without cargo, usually while coming back from freight destinations.
"The idea is to test our model thoroughly in a single country, in this case Brazil, and then do as Uber did, launching the service in several countries simultaneously," Vega told Reuters. With little rail infrastructure in the vast South American nation, the majority of freight in Brazil is transported by trucks.
Vega expects the company to break even by the end of 2017, despite a sharp decline in demand for freight services this year due to Brazil's worst recession since the 1930s. He said this could help the company as clients are keen to economize on freight expenditure.
The company said that other backers of the financing round included Oscar Salazar, co-founder of Uber Technologies Inc and Hans Hickler, former executive at DHL Worldwide Express BV.
Agility Logistics and investment firms Lumia Capital and Valor Capital Group also took part in the fundraising.
The second round of investment raises the amount CargoX has gotten from investors to 49 million reais ($15 million).
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