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'Unsexy' logistics, trucking, supply chain startups seek funding at first-ever Dynamo Demo Day
Coming to Chattanooga
Among 10 logistics businesses from around the world that participated in the Dynamo accelerator this summer, three are relocating offices to Chattanooga:Locatible› Service: Platform that allows logistics and operations leaders to pinpoint the location of their assets within 5 centimeters, allowing them to gain valuable real-time insights around work flow, asset optimization, workforce efficiency, and more› Size: Currently booking $2 million a year from a single health care client.› Where: Based in Dublin, Ireland, the company is opening a North American headquarters in Chattanooga› Founders: Ronan Ó’Cóigligh, Peter Kortvel› Website: www.locatible.comSkupos› Service: A cloud-based network to keep track in real time the inventory and sales at convenience stores to give store owners and distributors a clear view into inventory, ordering, delivery, and critical timed opportunities.› Size: Currently running a pilot of 200 or more stores in the San Francisco Bay area with plans for 1,000 stores by the end of the year.› Headquarters: Relocating from San Francisco to Chattanooga› Founders: Jake Bolling, Linh Nguyen, Mike Glassman› Website: www.skupos.comWorkhound› Service: A software platform built to help carriers keep drivers and improve the truck driver experience. Truck drivers use their smartphones to share feedback and ideas with the carrier, which WorkHound aggregates and turns into actionable insights to help manage and retain drivers.› Size: Anticipate more than $1 million in annual sales next year. Company has clients including U.S. Xpress Enterprises in Chattanooga.› Headquarters: The company is relocating its headquarters from Des Moines, Iowa, to Chattanooga› Founders: Max Farrell, Andrew Kirpalani› Website: www.workhound.comSource: Dynamo Accelerator
Ted Alling has aimed high - including with WayPaver Labs' Lunar Project to establish a settlement on the moon - in his role as a partner in The Lamp Post Group, a startup business "accelerator" in downtown Chattanooga.
But the Lamp Post Group got back down to earth - and its founders' roots - Tuesday morning at Demo Day for the Dynamo Accelerator, when representatives from 10 startup companies in the logistics, transportation and supply chain business made their pitch for funding.
Startups in these industries have been cast aside by other accelerators as "less sexy."
But investors think there's money to be made, said Alling, who founded the Lamp Post Group along with Barry Large and Allan Davis. The trio of business partners became millionaires in their 30s when their Chattanooga-based trucking logistics startup, Access America Transport, merged with Coyote Logistics which was sold last year to UPS for $1.8 billion.
"They want to invest in more unsexy businesses, the venture capitalists do," Alling said after Tuesday morning's event.
Unsexy or not, there were flashy trappings at the Tivoli Theatre. Song snippets from Jimi Hendrix, ZZ Top, Eminem and others introduced representatives from startup companies who took turns onstage for about five minutes each, to make carefully rehearsed sales pitches while dressed down in untucked dress shirts, blazers with jeans - and nary a necktie in sight.
"Trucking's a really hard job," said Max Farrell of WorkHound, a system that lets long-haul truckers vent their on-the-job frustrations anonymously via smartphone.
WorkHound's software compiles and analyzes complaints so companies can do a better job of retaining truckers - a big money-saver in an industry that Farrell said sees 95 percent of drivers quit their job annually to work for another company. With some 2 million drivers on the road, employee turnover costs the trucking industry $15.5 billion, annually, he said.
"Trucking is just the start," said Farrell, who sees a market for his "employee engagement software" in other professions, such as nursing.
Farrell is relocating his business from Des Moines, Iowa, to Chattanooga, thanks to the Dynamo, which launched this year and made space for participants in the Lamp Post Group's second-floor offices in the Loveman's Building downtown.
Skupos, a San Francisco-based startup that began nine months ago to serve the convenience store industry, also is opening an office in Chattanooga. Jake Bolling, co-founder and CEO of Skupos, said the business has contracts to serve more than 200 stores in the San Francisco Bay area and the company is expects to expand to more than 1,000 convenience stores in the next few months.
"The Lamp Post guys are obviously great, not just in the way they know the industry, but in how they have drawn the community in and brought great mentors and programs together to help connect these startup businesses with customers and investors," Bolling said. "Chattanooga is really the crossroads for a lot of the logistics industry."
Santosh Sankar, the director of the 12-week Dynamo project, said the accelerator program was born last year "with the audacious goal of supporting exceptional founders focused on transforming an industry worth over $4 trillion."
"We're working to put Chattanooga on the map as the capital of logistics, supply chain and transportation technology," Sankar said.
Another Dynamo participant, the Dublin, Ireland-based Locatible, plans to open its North American headquarters in Chattanooga. CEO Ronan O'Cóigligh said his startup company uses a magnetometer, a device that senses the earth's magnet field and is used in smartphones, to track the location of items inside warehouses within 5 centimeters in real time.
That can save companies millions of dollars over time, O'Cóigligh said, since lost items in a huge warehouse can delay trucks from leaving on time and cause other problems.
"There's a great vibe here," O'Cóigligh said of Chattanooga.
Dynamo leaders believe their program is the only logistics- and transportation-focused accelerator in the country. Running as a "sibling" to the accelerator, the Dynamo fund is an $18 million early stage fund investing in logistics startups. Most of the funding came from Chattanooga-based individuals and investment entities, several of which committed $1 million or more.
Business editor Dave Flessner contributed to this report.
Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/MeetsForBusiness or twitter.com/meetforbusiness or 423-757-6651.