FreightRover LLC, a supply-chain financing company, has signed a $500 million financing deal with Crayhill Capital Management LP, a New York based asset-management firm. The deal increases the company’s capacity to handle payments for trucking companies.
Truck operators use FreighRover to accelerate payments through a process known as invoice factoring. Operators use the company’s app to record shipments and get paid. The service is offered through the company’s affiliate Rover180 LLC.
“Crayhill is excited to partner with FreightRover’s experienced management team to scale its innovative Rover180 platform for transportation supply chain finance,” says Crayhill Capital Managing Partner Josh Eaton. “We are impressed by FreightRover’s ability to offer value-added technological and management solutions in the transportation industry and are well-positioned to help Rover180 leverage this expertise to bring efficiencies and scale to the supply chain finance markets. Crayhill’s expertise in providing asset-based capital solutions to trade finance and specialty finance companies, combined with our collaborative approach to assisting our partners in optimizing and executing their business plans, is well suited to help Rover180 capture this attractive market opportunity.”
FreightRover plans to use the full $500 million to work and roll it over every 42 days. That would mean that the company could potentially put $4.5 billion to work per year.
The company’s service comes at a relatively high price. Carriers pay an annual percentage rate of 9.5%-12%. But operators have the advantage of being paid immediately versus waiting several weeks to be paid.
“The capital resources provided by Crayhill and other investors, combined with our advanced technology platform, will enable FreightRover to fund the myriad of supply chain micro-payments across a highly fragmented supplier group,” says Eric Meek, CEO of FreightRover.
The deal with Crayhill comes as shippers are struggling to find trucks to move freight. Companies are also taking longer to pay their suppliers, including truck operators. The top 1,000 largest companies in the United States took about 56 days to pay bills last year, according to research from Hackket Group Inc. In 2016, companies took 53 days to pay their bills.
FreightRover is hoping to draw small operators to its platform. The service would allow operators to get paid more quickly and without having to spend additional capital on back offices to process invoices.
There are about 700,000 private carriers registered with the Federal Motor Carrier Safety Administration, according to the U.S. Department of Transportation. Nearly all of those carriers operated fewer than 20 trucks. FreightRover is hoping to attract those private carriers with its services.
Inc. 5000 firm Transportation One has adopted FreightRover’s technology to make the freight management process more efficient.
