Information on the Target

Wiz is a pioneering digital freight forwarding platform designed to streamline and enhance the freight booking process. By focusing on digitization, Wiz aims to minimize complexities associated with traditional freight forwarding, which often relies heavily on outdated methods such as phone calls, paper, and WhatsApp communications. With an impressive team led by industry veterans Ram G. and Ram R., Wiz has developed a full-stack solution that allows businesses to discover, book, and manage cross-border shipments efficiently.

The company's operations are tailored to serve enterprises and mid-market customers primarily in India, the Middle East, and Southeast Asia, which collectively account for a significant portion of the export-import market (EXIM). Wiz has successfully garnered a diverse customer base of over 200 companies, benefiting from a monthly revenue growth rate exceeding 2x since its launch.

Industry Overview in India

India's freight industry is one of the most fragmented sectors globally, characterized by more than 80,000 offline freight forwards, predominantly family-owned businesses. These intermediaries act as connections between shipping lines, other forwarders, and end customers. While they play a vital role in facilitating logistics, many lack technology, predictability, and transparency in their operations. This inefficiency leads to hidden charges and unpredictability in freight costs, causing significant challenges for shippers.

The traditional booking processes in the freight industry involve cumbersome procedures that stretch up to ten days for businesses seeking quotes and confirmations for container booking. The lack of digital solutions has resulted in inefficiencies such as limited price transparency and excessive reliance on manual communication, making the industry slow to adapt to changing market conditions.

Furthermore, the Covid-19 pandemic has exacerbated existing issues, leading to unprecedented container shortages and skyrocketing freight costs — a staggering 547% increase from the seasonal average for shipping a 40-foot container from Shanghai to Rotterdam. As these macroeconomic factors affect logistics, businesses are increasingly seeking digital first solutions to streamline operations and address inefficiencies in the sector.

Despite these challenges, the demand for freight services remains robust, with market conditions indicating a continued need for innovative digital platforms that can disrupt traditional practices. The shift towards digitization is not just a trend but a necessity for companies looking to improve operational efficiency and manage costs effectively.

The Rationale Behind the Deal

The investment in Wiz is driven by the urgent need for transformation within the freight forwarding industry. With the pandemic serving as a catalyst for change, there is a growing emphasis on eliminating intermediaries and enhancing operational transparency through technology. Wiz's approach addresses these critical challenges by offering a platform that centralizes and automates the freight booking experience.

This innovative model stands to benefit both enterprises and small-to-medium businesses (SMBs) by reducing booking cycles from ten days to mere hours. Importantly, by working directly with asset-based carriers, Wiz can facilitate better pricing and eliminate issues associated with traditional forwarded price discovery, thereby capturing larger market share in a historically fragmented industry.

Information About the Investor

Axilor Ventures is a prominent venture capital firm known for its focus on early-stage investments across various sectors, including supply chain and logistics. With a robust portfolio, Axilor is committed to supporting innovative startups that are poised to disrupt traditional markets through technology and strategic insights.

Alongside Axilor, the investment also includes collaboration with Arali Ventures and Foundamental, both of which leverage their extensive networks and industry expertise to help scale transformative startups like Wiz. Together, these investors aim to catalyze significant growth for Wiz and foster advancements in the freight and logistics sector.

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The deal with Wiz represents a timely and strategic investment in a sector ripe for evolution. Given the complexities and inefficiencies plaguing traditional freight forwarding, Wiz’s digital platform is well-positioned to meet the demands of modern logistics operations. By simplifying and automating processes, Wiz not only enhances operational efficiencies but also delivers cost savings for businesses that rely on international shipping.

Wiz's focus on direct relationships with carriers allows the company to provide competitive pricing that is estimated to be 30%-50% lower than traditional forwarding rates. This significant cost advantage, paired with its successful penetration of a market with a demonstrated need for digitization, indicates strong potential for robust revenue growth.

Overall, the strategic collaboration between partners and the innovative model employed by Wiz suggests a bright future for the company. As the freight industry increasingly embraces digital solutions, investments like these could yield substantial dividends as Wiz continues to capture market share and streamline supply chain operations.

In conclusion, Wiz's unique approach and growth trajectory position it as a sound investment opportunity in the logistics space, promising considerable returns as it helps redefine the future of freight forwarding.

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