Today we’re excited to announce that Scale is leading a $38M Series B investment in Rose Rocket. The Toronto-based company has been on our radar for many years, with a founder whose thinking we always admired, and a team we’ve really enjoyed getting to know. They have tremendous momentum and a trajectory where outer space is the limit.
In many ways, this investment came easily to us. In 2017 we invested in Motive and have had a front-seat view to the explosion of technology in the transportation industry. We’ve also blogged about the misconceptions in vertical SaaS and why we like these categories. RoseRocket’s co-founder and CEO Justin Sky was a someone we spoke with regularly, and when the opportunity to invest presented itself, we jumped on it.
We particularly like the company because of their ability to marry the two items we see key to success in vertical software: product innovation paired with distribution innovation. Rose Rocket delivers a Transportation Management System (TMS), a large and fragmented category that has been around almost as long as software itself. The challenge with the category is that there are many constituencies: shippers that need products transported, carriers that move the actual products, and brokers that act as intermediaries between these two constituencies. Further, there are many forms of transportation (truck, air, train, ocean) and the full spectrum of operations, from one-person businesses to Fortune 500 companies. Inherent in this massive ecosystem is a network; all of these different players communicate with each other, they bid and tender freight, communicate real-time tracking, and facilitate payment upon completion.
Rose Rocket has built an incredibly well-designed product that spans across many of these customer segments in a way that previous vendors were never able to before. Much like Salesforce is able to support Scale Venture Partners as well as the largest companies in the world, Rose Rocket supports SMBs and enterprises. Likewise, their product is relevant to a significant majority of the players in the spiderwebs of transportation.
Selling to these customers is not easy task. They’ve been inundated by mediocre vendors for years, they’ve had failed implementations, or are busy driving a truck, or managing a warehouse. Because Rose Rocket is so ubiquitous, however, the company pushes much of its product through a PLG motion. In fact, many Rose Rocket customers first experience the product not as a customer, but through a vendor or partner, much like you signed on DocuSign long before you purchased the product, or received a shared file on Box.
By bundling product ingenuity with distribution innovation, Rose Rocket has achieved tremendous success. We see a future where they will be the definitive system of record for much of the transportation industry, and look forward to accompanying them on this right. Onwards and upwards, Justin, Justin, Mike, and the rest of the Rose Rocket team.