Rose Rocket, a maker of transportation management software (TMS), said it has raised a $50.2 million CAD ($38 million USD) Series B round. The latest round brings the startup’s total funding to $91.3 million CAD ($69 million USD).
The Toronto-based startup, which works on a software-as-a-service (SaaS) model, said it plans to use the funds to expand into larger fleets of trucking companies in the enterprise space. As well, Rose Rocket will further accelerate its investments in product development and network-collaboration efforts to serve what it called its rapidly growing customer base.
Scale Venture Partners led the equity round with continued participation from current investors Addition Capital, Shine Capital, Scale-Up Ventures, Funders Club and Y-Combinator. The round closed at the end of March.
“Rose Rocket stands alone in its ability to serve companies of all sizes, bringing together everyone in the freight network.”
—Alex Niehenke
Partner, Scale Venture Partners
“Within the massive transportation and logistics industry, the mid-market and enterprise operate with highly custom workflows, and no two companies are the same. The TMS that wins in this space must be able to accommodate for changes in how companies work,” said Alex Niehenke, general partner at Scale Venture Partners.
“Rose Rocket stands alone in its ability to serve companies of all sizes, bringing together everyone in the freight network,” Niehenke added. “Its platform can fundamentally shift how transportation companies run at a time when help is desperately needed.”
Justin Sky, CEO and co-founder of Rose Rocket, emphasized to BetaKit the importance of making its TMS more adaptable and personalized. Sky said Rose Rocket recognizes that trucking companies, particularly those with larger fleets, have unique operational patterns.
“Our vision is to evolve Rose Rocket into a new generation of software that serves everyone in trucking, from a solitary broker to extensive fleets with thousands of trucks,” Sky said. “Our emphasis lies in ensuring that Rose Rocket’s TMS accommodates individual ways of working— from customizable fields to unique business rules.”
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Rose Rocket’s TMS consolidates invoicing, billing, and real-time analytics reporting and acts as a mobile app for truck drivers, among other functions.
Sky claimed that because the startup’s TMS is cloud-native, it offers an edge over the competition. He argued it ensures neither price nor user education stands in the way of effective software adoption, whereas other TMS platforms are just beginning to migrate to the cloud.
Additionally, the startup adds updates and enhancements to its product every two weeks. “This agility is a hallmark of being a cloud-native technology,” Sky said.
Sky called TMS a “system of truth for transportation companies.” According to Sky, “Our current [competitors] include on-premises software companies founded in the 1980s, and newer but more niche software that serves a small segment of trucking use cases.”
Rose Rocket’s customer base now numbers between 1,000 and 1,500. Since its founding in 2015, the startup has grown to over 150 employees. It previously raised $31 million CAD ($25 million USD) in its Series A funding round in 2021.
Before that, Rose Rocket moved to Silicon Valley for Y Combinator’s summer 2016 cohort, securing an undisclosed amount of funding in the process from the incubator. Typically, Y Combinator invests $158,700 CAD ($120,000 USD) in startups twice a year.
Sky said the biggest reason a single TMS company hasn’t successfully dominated the market is because of the vast segmentation that exists in trucking. He pointed out that a small broker needs a different system than an enterprise carrier because their different workflows need to be effective.
“Prior to Rose Rocket, a single player has not successfully serviced the range of companies that exist in this space,” Sky said.
