The importance of last-mile delivery, or moving goods from a shipping hub to their final destination, came into sharp focus during the pandemic. statistic projects that e-commerce will cause the global last-mile delivery market to double to more than $200 billion by 2027. But as deliveries of essential goods on the last mile continue to increase, so do customer expectations. According to an Anyline questionnaireMore than three-quarters (76%) of shoppers said an “unacceptable” delivery experience — say, a very late one — would influence their decision to order from a company again.
It is therefore no surprise that the market for last-mile delivery technologies is an active one. Companies such as Zipdi and Carmagos use robots and mini-distribution centers to streamline inventory for last-mile delivery, while others, such as GetHenry in Berlin, supply e-bike fleets to corporate customers such as Gorillas and JustEatTakeaway.com.
A growing segment of the last-mile market is fully focused on logistics, including: onfleet, which claims its software enables millions of deliveries per week for thousands of businesses (including Sweetgreen). Proving that demand for last-mile solutions could overcome broader economic headwinds, at least in the near term, Onfleet announced today that it has raised $23 million in Series B funding led by Kayne Partners with the participation of Savant Growth .
Co-founder and CEO Khaled Naim said the new capital will be spent on product development, expanding Onfleet’s product and engineering capabilities and enhancing the company’s business offerings. It brings the total amount raised from Onfleet to just over $40 million to date.
“The pandemic dramatically accelerated growth in the market (and the growth of Onfleet) and created a need for these types of services that did not exist before,” Naim told gotechbusiness.com in an email interview. “There was a time when fear and uncertainty surrounded supermarket visits, so delivery was simply a safer option for consumers, especially for demographics such as the elderly or those with pre-existing conditions. Delivery, driven by consumer demand and the pandemic, is increasingly the main channel for businesses, especially in the grocery, cannabis, convenience and restaurant, alcohol, pharmacies and retail categories.”
Naim launched Onfleet in 2015 along with Mikel Carmenes Cavia, a classmate of Naim, and David Vetrano, whom Naim met during his MBA at Stanford. The three grew up in the Middle East and were inspired to develop a “universal way to share a location,” which became Addy, a platform that allowed anyone to create a URL that displays latitude and longitude coordinates.
After trying to commercialize Addy with delivery companies, Naim said he realized many of these companies were not using logistics technology. Instead, their coordinators memorized every tree and fork in the road and used that experience to manage fleets of drivers. It was then that he, Cavia and Vetrano decided to expand their vision and develop a delivery management platform: Onfleet.
“When delivery drivers started using smartphones to communicate with dispatchers, we thought, ‘Okay, that’s interesting. Most drivers will soon have smartphones. If they all have devices, the dispatcher can track them with GPS, send them work in real time and optimize routes in a more dynamic way,” Naim said. “Last mile costs and complexity of delivery, especially for new entrants, are difficult to control. Onfleet’s technology helps companies streamline this tough undertaking by efficiently connecting companies, dispatchers, drivers and deliveries to satisfied customers.”
OnFleet provides a dispatching dashboard where users can optimize routes and search for drivers and deliveries or pick-ups. The platform recommends routes that take into account factors such as time, location, capacity and traffic, and can automatically assign tasks to drivers.
Onfleet also provides customers with status updates, including real-time driver tracking and proof of delivery. In the backend, managers — who can chat with drivers through the platform — see performance metrics like on-time rates, service times, feedback scores, and more.
“Onfleet leverages machine learning for driver optimization and prediction, providing operations teams and consumers with up-to-the-minute information, automation of decisions and proactive notifications. We derive a data set by analyzing location data for delivery segments and filtering out anomalous segments — we collected approximately 500 million miles of anonymized driver location data, comprised of tens of billions of data points,” Naim said. We are working on more refined models to better predict travel time and operational parameters and aspects of the delivery process, such as parking and building boarding time.”
Some drivers may object to that kind of telemetry, especially in light of recent coverage of the trials of remote delivery fleets. For example, according to According to a recent survey by the Strategic Organizing Center, nearly one in five drivers making deliveries for Amazon suffered injuries in 2021 as they faced quota penalties and pressure to move packages as quickly as possible.
However, Naim argues that Onfleet is just a way to help underperformers improve at a time when there is a serious shortage of drivers. The US alone faces a shortage of more than 80,000 truck drivers, the American Trucking Associations estimates — a number that is expected to increase as demand for supplies increases.
“We want to make it easy for small and medium-sized businesses to track the value they’re adding to their business by offering delivery,” said Naim. “The driver shortage has plagued the transport, logistics and delivery industries for years, and the pandemic has exacerbated its impact. With the shortage of talent, the prioritization of work-life balance as drivers spend more time away from home, and the skills gap given the profession may require special training such as truck licenses, etc., it is becoming increasingly difficult to find people to for these types of people to hire roles. Our platform supports companies in this area with automated route optimization so that they can monitor activity and reduce the number of drivers needed at any given time.
Naim was unwilling to pull the curtain on Onfleet’s financials, but he claimed the company is “on track for continued growth” as it tries to differentiate itself from rivals such as Wise Systems, Routific and Bringg. Within the year, San Francisco, California-based Onfleet plans to increase its workforce from 120 to approximately 150.