Al Gore and Maersk invest $80 million in Chicago logistics software maker Project44
So-called unicorns, or venture-backed companies valued at over $1 billion, soared during the tech boom that ended earlier this year. Since then, many have laid off workers and cut costs to make their money last longer. Tech stocks slumped, dragging down private company values, especially those near exit deals, such as stock offerings or acquisitions. Pre-crisis, P44 was talking about IPO prospects, much like Tempus Labs, a health data startup launched by Eric Lefkofsky, which also raised funds recently.
“Companies that are growing, successful, and ideally have a path to profitability are bankable,” says Steve Kaplan, a professor who studies private equity and venture capital at the University of Chicago Booth School of Business. . “There is still a huge amount of dry powder in growth stocks. So we will still see good companies able to raise funding at solid valuations, but not the frothy valuations of last year.
P44’s latest funding was led by Generation Investment Management, the London-based fund co-founded by former vice-chairman Al Gore, as well as AP Moller Holding, the parent company of shipping giant Maersk. CMA GM, a French container shipping company, also invested, along with former backers such as Goldman Sachs, Thoma Bravo, TPG and Chicago Ventures.
P44’s software is used by more than 1,000 shippers, like Amazon, to track their shipments in transit. More than 220,000 road, rail, sea and air carriers are connected to the company’s software platform.
The company says it will use the funding, in part, to add the ability to measure the impacts of shipping pollution for its customers. Companies are under increasing pressure from consumers, trading partners and governments to consider the carbon footprint of their supply chains.
Since its inception in 2014, P44 has expanded globally from trucking to ocean freight. The subscription software company has nearly 1,200 employees, including 279 in Chicago, and its annual recurring revenue is about $135 million, up 70% year-over-year. The company says it expects to become profitable without additional capital.
Although P44 has been an active acquirer, CEO Jett McCandless said it has more than $200 million from its previous fundraising and still hopes to pursue an IPO in a year or two.