Co-founder Patrik Berglund claims their company might not look that sexy, but to me, disrupting prices in the absolutely massive container shipping industry is incredibly easy on the eyes. What Oslo-based Xeneta does is similar to what Glassdoor did for employee wages. They offer a price comparison service for sea freight, and yesterday announced they received €1.2 million in financing led by Creandum, with Norwegian private investment company Alden co-investing.
Berglund and one of his co-founders, Thomas Sørbø, got their start at Kuehne & Nagel, a freight company. After leaving in 2011 for shipping and logistics consulting, they realized pricing is extremely volatile, and there was really no transparency in the industry. So they set out to do for sea freight how you buy airline tickets - prices are there in front of you.
For growth, they need some sort of critical mass so they can actually provide price information. So if they wanted to add a company from Nigeria, they would need other companies moving containers so they could actually aggregate information. Xeneta initially built their network in their native Norway, and have added other European countries on. But they're seeing strong demand from the U.S., so in the near future they're going to go on a roadshow to get 10-20 shipping companies onboard to get a foothold in the market.
This is what their investment will mainly be used for. More money is being thrown into their technical infrastructure, but mainly they're focused on the B2B sales to get more companies and data-points onto the service, which takes boots on the ground.
Their benchmarking tools are available for companies for free, allowing them to get as many companies onboard to more information to aggregate. So on their business model side they've added value-added services that companies can subscribe to.
They give a case-study example of ICA, a Swedish retailing corporate group, who reduced their sea freight rates by more than 30% after getting access to transparent rates. Berglund makes the point that some of these groups are moving tens of thousands of containers a year, so even if they can save them €100 a container, they're helping companies save a ridiculous amount of money.
In total, this is one of the companies I love the internet for. Sure, social apps are all good and well, but aggregating prices in a multi-billion dollar industry is real world value that wold have been impractical 20 years ago.