Uber will continue as a majority shareholder in Uber Freight, now valued $3.3 billion.

New York-based Greenbriar Equity Group, a top-tier investor in logistics businesses, will invest $500 million in a Series A preferred stock financing for Uber Freight, the logistics arm of Uber. The transaction valued the business at $3.3 billion, post-money.

Uber Freight, which launched in 2017, is a logistics platform that connects up trucking companies with shippers. It has been growing rapidly but is still unprofitable. During the second quarter of 2020, it clocked $211 million in revenues, up 27% from the previous year. However, it reported an adjusted net loss of $49 million for the quarter.

The logistics business has signed new API integration partnerships with cloud TMS providers. These include SAP, Blue Yonder, BluJay, MercuryGate, and Oracle. In an enterprise thrust, it launched new software Uber Freight Enterprise and Uber Freight Link.

Large investment and indefinite runway

According to FreightWaves, which quoted Uber insiders, the Greenbriar’s investment is the largest ever capital investment for a minority position in a third-party logistics provider.

The freight broker might, therefore, have extended its cash runway indefinitely.

“We got to the point where we have so much scale and very meaningful multiyear deals with enterprise shippers as we play a bigger, critical role in the supply chain, that we wanted to signify that we’re committed to the transformation and a very long time horizon on the business,” said Lior Ron, head of the business, to FreightWaves. “We wanted customers to understand that we’re here for the long haul.”

Greenbriars, on the other hand, likely needed to place a large bet on North American truckload brokerage. It’s a rapidly growing but fragmented industry. Uber Freight was an obvious choice, given it has grown to become the largest digital freight brokerage by revenue.

Michael Weiss and Jill Raker, Managing Partners of Greenbriar, will join its Board of Directors.

“Uber Freight has created an innovative and effective approach to logistics technology that we believe is highly scalable in the coming years,” said Weiss in a statement. “In particular, we believe that carriers and shippers will be increasingly attracted to the convenience and simplicity that it offers in a complex marketplace.”

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Image Source: Uber Freight