Brazilian truckers still get much of their business off of handwritten placards.
The antiquated and inefficient system was ripe, low-hanging fruit to Federico Vega. While cycling from Patagonia to Brazil, he met truckers who complained of spending most of their time looking for freight, receiving low wages and dealing with disorganized transportation companies that sometimes reneged on payment.
So Vega built CargoX, an Uber-like enterprise that links truckers and companies requiring their services. It also guarantees payment and maximizes logistics so cargo holds don’t go empty.
Federico Vega, founder and chief executive officer of CargoX Transportes, speaks during the Milken Institute Global Conference in Beverly Hills, Calif., May 2, 2017. (Patrick T. Fallon/Bloomberg News)
“We have the chance to have a massive impact in Brazil,” Vega said in an interview. “We’re starting a revolution more than a company, getting top investors to explore this market.”
Some of those “top investors” Vega refers to include Goldman Sachs, its biggest backer, and George Soros, who holds a small stake. And the Uber comparison isn’t just talk.
Oscar Salazar, the ride-hailing unicorn’s founding chief technology officer, was an early CargoX investor. Its clients include Unilever NV and Ambev SA, and it has about 7,000 drivers registered. Ambev and Unilever declined to comment.
“CargoX showed impressive growth since it launched in 2016 and we believe that it has great potential to continue expanding,” Hillel Moerman, co-head of Goldman Sachs Private Capital Investing Group, said. “The business has solid proprietary technology infrastructure that gives them the opportunity to reduce the cost of moving freight while improving the level of service.” Soros Fund Management declined to comment.
Vega is tackling an industry that’s fractured and overbuilt, according to one advocacy group. It’s also disgruntled, if the recent country-crippling strike is any indication.