After months of intimating that a large round was coming, BasicBlock announced on Monday a $78 million mixed round of debt and equity. This is a substantial win for the Middle, particularly Nebraska, although as part of the announcement BasicBlock provided context that much of the growth will occur in Chicago.
The company has seen increasing traffic on its efforts around factoring. Factoring is a financial tool that allows debtors to sell their accounts receivables to a third party for a reduced amount in cash now. The company provides factoring services to truckers – meaning that BasicBlock is offering a factoring service that requires significant cash to leverage into the immediate payments to drivers. Thus, while $78 million is a big round by any standard, it is also an indicator of successful customer adoption of the basic business premise – to provide fast cash to drivers after they drop their shipment at its destination.
LINCOLN, Neb., Jan. 24, 2022 /PRNewswire/ — BasicBlock Inc., a financial technology company that is reshaping financing options for the trucking industry, today announced a $78 million debt and equity raise, to fuel expanded services, client support and employment opportunities throughout the U.S. Lead investors and lenders in the round include Autotech Ventures, Clear Haven Capital Management, Emergent Ventures, and Nelnet alongside continued investment from Revolution’s Rise of the Rest Seed Fund, SaaS Ventures and TNT Ventures.
BasicBlock launched in 2018 as a simple trucking document capture tool that allowed drivers to scan and send load documents at low rates. The company has evolved to become a complete payment platform for carriers nationwide that ensures same-day payment and exceptional customer service. The influx of capital will allow BasicBlock to continue focusing on factoring while adding and expanding services to help carriers grow their fleets.
“Prior to starting the company, I spent more than six months traveling the country with truckers to truly understand the business. 96% of commercial trucking companies in the U.S. have less than six trucks, and one of their biggest pain points is access to capital,” said Taylor Monks, BasicBlock CEO and co-founder. “We launched BasicBlock with a freight factoring app to enable drivers to get paid as quickly as possible and have evolved to provide critical working capital to fleets who cannot secure it through traditional financial institutions.”
As BasicBlock grows, a portion of the funds will be used to expand company operations to Chicago.
“Since November, BasicBlock has seen a 50% increase in drivers it serves, and its factoring volume has increased 60%,” said Brett Byman, BasicBlock COO. “Establishing an office in Chicago, one of the leading freight-tech cities in the U.S., will enable us to meet the needs of our increasing national customer base and improve upon our already industry-leading customer service.”
Amid global supply chain challenges, the announcement of the raise comes at a time when VC activity in the trucking, transportation, and fintech sectors is at an all-time high.
“Freight carriers continue to experience difficulty meeting working capital demands because traditional financial institutions are not meeting the needs of owner operators and small carriers,” said Burak Cendek, partner at Autotech Ventures. “BasicBlock has developed a solution to enable this critical piece of the supply chain access to financing in order to compete. Autotech Ventures sees great potential in BasicBlock’s current offering as well as its plans for the future.”
“It’s our mission to provide efficient, scalable financing for early-stage companies, like BasicBlock, who are emerging as leaders in the FinTech industry. We’re excited to work with the BasicBlock team as they continue to reshape the freight factoring industry and enable quick, seamless payment for carriers,” said Mark Simmer, partner at Clear Haven Capital Management.
