Target Information

Onward Delivery is a freight marketplace that facilitates connections between retailers of heavy goods and available trucks en route to their delivery destinations. By leveraging technology, Onward Delivery aims to optimize the logistics of delivering bulky items, such as furniture and appliances, which currently face chronic inefficiencies in the supply chain.

The company addresses the critical gaps within the logistics sector, particularly amidst the ongoing supply chain crisis in the United States. Their service, often referred to as “item hitchhiking,” provides retailers with diverse delivery options, enhancing speed, cost-effectiveness, and delivery methods for customers.

Industry Overview

The logistics industry in the United States is currently grappling with significant challenges due to a supply chain crisis that began affecting the shipping ports and the “middle mile” delivery segment. This situation is projected to escalate into the “final mile,” impacting deliveries in the last 50 miles. As a result, retailers are increasingly faced with extended delivery times for medium and large-sized goods, leading to unsatisfied customers.

Major contributors to this crisis include a shortage of truck drivers and endemic inefficiencies within the delivery system. Remarkably, 95 percent of trucks operate below full capacity, and nearly 40 percent of deliveries occur with less than half of the truck's cargo hold filled. These issues not only cause delays but also result in inflated costs for companies reliant on prompt delivery.

For heavy goods companies, the effects are particularly alarming, with average delivery times creeping up to 35 days. This not only degrades the customer experience but poses serious challenges for companies striving to deliver their products efficiently while maintaining profitability.

Overall, the logistics sector is straining under these pressures, as delivery companies confront reduced margins applied by ineffective operations, which diminish overall profitability and customer satisfaction.

Rationale Behind the Deal

The investment by Matchstick Ventures Fund III in Onward Delivery is strategically timed to confront the urgent challenges poised by the current supply chain crisis. Onward Delivery’s innovative model directly addresses inefficiencies by streamlining the connection between retailers and logistical resources, offering a solution that is more timely and cost-efficient.

Investing in a company like Onward Delivery not only targets the immediate supply chain issues but also positions stakeholders to benefit from the wider industry shift towards enhanced efficiency and customer satisfaction.

Investor Information

Matchstick Ventures is a well-regarded venture capital firm dedicated to backing innovative startups that demonstrate potential for significant impact within their industries. The firm is recognized for its hands-on approach, often guiding entrepreneurs through early-stage challenges to foster growth and scalability.

Having previously engaged with the Onward Delivery team through the Techstars Iowa program, Matchstick Ventures brings expertise and mentorship to the table, further enhancing the company’s capacity to navigate the competitive landscape of logistics and delivery services.

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This investment appears to be a well-calculated move. Given the acute supply chain issues currently prevalent in the U.S. logistics industry, Onward Delivery's focus on improving delivery efficiencies for heavy goods stands to significantly enhance both customer experience and company profitability.

Onward Delivery’s innovative approach to “item hitchhiking” is not only timely but also essential. By utilizing existing transport routes better, the company can assure quicker service while reducing the total number of trucks required on the road, thus fostering sustainable logistics practices.

Furthermore, the founders’ extensive experience in the final mile delivery sector underscores a deep understanding of the industry's challenges, making them well-equipped to implement strategic solutions effectively. Thus, this investment carries promising long-term potential.

Overall, investing in Onward Delivery at this juncture presents a unique opportunity to capitalize on a critical need within the logistics industry, positioning both the company and the investors for substantial growth and sustainability.

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