Denim, a fintech platform for freight brokers, raises $126 million in equity and debt • TechCrunch
Denim, the shipping and logistics fintech platform formerly known as Axle Payments, announced today that it raised $126 million in a Series B funding round led by Pelion Venture Partners with participation from Crosslink Capital, Anthemis, Trucks VC, FJ Labs, Tribeca Early Stage Partners and Refashiond Ventures at a “nine-figure” valuation. CEO and co-founder Bharath Krishnamoorthy tells TechCrunch that the new cash, a combination of equity ($26 million) and debt ($100 million), will be used to scale the business and provide Denim’s customers with working capital.
Krishnamoorthy and Denim’s other co-founder, Shawn Vo, had been friends for 16 years before launching the company. Vo was in the credit risk department at Barclays and a full-stack developer at Fintria, a fintech company, while Krishnamoorthy was an associate at several law firms, including Gibson, Dunn & Crutcher.
“We witnessed a significant gap in the freight brokerage market, where legacy systems – i.e. paper checks, physical filing – were still in place, and developed an intuitive payment technology to streamline brokerage operations and attract the best carrier relationships through the platform, Krishnamoorthy told TechCrunch via email mail.
To that end, Denim offers financial products, operational tools and automated workflows for freight brokers – the middlemen between shippers and carriers. The company handles brokerage invoicing, collection and payments and also provides access to debt financing.
“The industry has shown reluctance to abandon its old processes – many shippers still pay freight brokers on 30-60 day terms despite carriers expecting near-instant payments. These longer timeframes can create cash flow problems,” Krishnamoorthy added.
Manage jobs in Denim.
Denim uses algorithms to reduce the time its operations team spends evaluating the risk of invoices it buys from brokers. For each shipment, these algorithms review 20 different data points and either approve the purchase or flag that a manual review is required.
In addition, the Denim platform integrates with accounting software such as QuickBooks to allow brokers to share data between various existing systems. From a dashboard, users can view metrics such as pending or completed jobs, total factored amounts, the most used carriers, and the fastest paying customers.
“This combination of automation, financial stability and accurate reporting enables freight brokers and their partners to navigate volatile changes in the economy. And most importantly, it ensures that the entire supply chain continues to move in the right direction, Krishnamoorthy continued. “In our current economic environment, businesses cannot afford to ignore backend risks and slow processes.”
Denim competes with other fintech firms in the space, including TriumphPay, HaulPay and OTR Capital. Curiously, Krishnamoorthy refused to say how many customers the company currently has or where its revenue lies. But he volunteered that Denim has connected over 7,000 freight brokers, shippers and carriers since its launch three years ago.
“Despite the downturn, Denim is uniquely positioned to continue to scale its platform and workforce. We have established a financial model based on sound unit economics,” said Krishnamoorthy. “We are bringing new solutions to the market to enable freight brokers to seamlessly operate at full capacity and adapt to changes in the supply chain. And we hire talent that not only aligns with our business goals, but with our core values.”
Denim has 100 full-time employees and plans to reach 120 by the end of the year, partly funded by the new equity. To date, the startup has raised a total of $165 million.
