Kargo closes on $42M funding round to automate loading dock and warehouse operations – News

Freight shipping artificial intelligence startup Kargo Inc. said Tuesday it has closed on $42 million in new funding in order to scale up deployments of its smart loading dock and warehouse technology.

The Series B round was led by Avenir and saw participation from a host of other backers, including Linse Capital, Hearst Ventures, Lightbank, Matter Venture Partners and Sozo Ventures.

Kargo is using AI to transform loading docks and warehouses into a primary source of operational data and insights for logistics and supply chain operations. The startup’s tech encompasses physical towers and lifts installed at docks and gateways that are equipped with sensors that feed information into its software platform. Its goal is to automate shipping and receiving workflows and eliminate the manual scanning of tags and the hassles of change management.

The startup explained that its system inspects new freight deliveries for signs of damage, verifies that shipments are in order by comparing them with bills of lading, and pushes inventory data into customer’s systems to enable real-time visibility and compliance. Should a problem be identified with a specific delivery, Kargo will flag the shipment immediately and document the issue with visual evidence to help customers achieve faster resolution of any damages claims they might make.

But that’s not all Kargo does. Beyond inspecting and verifying cargo, the startup also consolidates scheduling, driver check-ins and dock door allocations within a single workflow that can adapt in real-time to real-world conditions. For instance, if a dock is overwhelmed by inclement weather, it can make recommendations on labor allocation, overage, shortages and damages and advise on operational practices.

Kargo, which previously raised $25 million in its Series A funding round back in 2022, said it has significantly expanded its customer base since then. During that time, it has grown from just three to more than 45 customers, including Fortune 500 enterprises in the food and beverages, pharmaceutical and automotive industries. The startup highlighted its longstanding relationships with Mercedes-Benz AG and Wayne Farms LLC, and said more than 1,000 of its towers have been deployed in the U.S. alone.

Founder and Chief Executive Sam Lurye said the company has tripled its revenue over the last year. He thinks this growth reflects the powerful network effects of its technology.

“Once Kargo sensors are deployed in a warehouse, customers want Kargo upstream and downstream in their supply chain,” he explained. “We typically see additional orders by the same customers within three months because the data accuracy is recognized immediately and the ROI is often realized in weeks.”

The startup also points to the broader momentum of AI and automation in warehousing operations — one of the best-known examples being Amazon.com Inc. It cited a recent report by Grand View Research, which shows that AI in warehousing is expected to proliferate in the next few years due to the way it helps to make operations more efficient and accurate and helps ease labor constraints.

Avenir Partner Jared Sleeper had a lot to say about Kargo too, calling it a “category-defining company” that adds value to every node in the supply chain. “Instead of trying to force everyone onto the same standard or relying on heavily customized hardware solutions, it’s introducing a universal interpretation layer that benefits every supply chain player while de-risking and simplifying deployments,” he said.

Kargo said it will use the funds it has raised to develop new applications that sit atop of its proprietary freight data foundation. One of those is Kargo Intelligence, a newly developed tool that automates back office workflows such as invoicing, claims disputes, financial reconciliation and customer service, supported by visual data from its loading dock towers.

Images: Kargo