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April 30, 2020

Why we invested in SimpliRoute

TheVentureCity Team

We are thrilled to lead the Series A round in SimpliRoute, a SaaS platform that helps companies with last-mile needs to adopt logistics technology with minimum impact and cost while using advanced route optimization engines and machine learning modules.

SimpliRoute started with founder Alvaro Echevarria’s master thesis at the University of Chile, where he developed a logistics model to improve the response time for the fire department of Santiago. The model was able to reduce their response time by 40% which dramatically improved their ability to save people’s lives. Alvaro quickly realized that other industries can also benefit from precise route optimization and last-mile intelligence in order to manage resources more effectively. And voilà, SimpliRoute was born.

Latin America is one of the most complex regions in terms of logistics due to the lack of infrastructure. Most delivery fleets still struggle with optimal route planning, live tracking, and the ability to easily communicate with drivers or customers. Most enterprises have siloed teams that deal with customers, warehouses, and drivers, making it very hard to align efficiently on delivery planning, tracking, and updating. Despite the seemingly insurmountable challenge, SimpliRoute was determined to solve these pain points and become the best source of dynamic routing and last-mile intelligence in Latin America.

After years of perfecting their technology, SimpliRoute’s platform today helps transportation, retail, CPG, and e-commerce companies reduce their logistics costs and improve their overall route efficiency. SimpliRoute has a very robust routing and tracking system powered by machine learning that continuously improves as more customers are added to its network. At the same time, their algorithm has been consistently trained and tested for the past four years giving them a significant advantage against new market entrants. Despite the infrastructure barriers that are particular to the region, SimpliRoute’s algorithms have proven to be adept at overcoming these limitations and providing valuable solutions to their clients.

SimpliRoute develops and owns every optimized route solution that the platform creates, enabling customized routes for each customer. This is a critical asset because it gives them flexibility in adapting to new customers while accumulating the data required to develop even stronger algorithms in the future. SimpliRoute serves companies of all sizes, from small corner shops in Santiago to big giants like Walmart and Unilever. The ability to serve both SMBs and large corporations at scale separates them from the pack and positions them well to continue gaining market share.

We were very impressed by SimpliRoute’s team, which is composed of mathematicians, engineers, and product and operations experts. They have built one of the most solid technological foundations among the early-stage companies that we have analyzed. This includes the process, software stack, infrastructure and key assets. As our General Partner Laura Gonzalez-Estefani said, “if this team was able to build something that works well in logistics, in one of the most complex regions for these matters, they will continue to build incredible things in the future.”

While we have been following SimpliRoute since last year, their timing in the market today couldn’t be more appropriate. In a world of COVID-19 and home confinement, many companies are racing to implement technological solutions to reach customers more effectively and guarantee the most efficient delivery route from the warehouse to home. This has been no different in Latin America where strict lockdowns have been implemented in most countries. Many of the region’s CPG and retail companies were waiting for Amazon's entry in the region to help accelerate their digital transformation. COVID-19, however, has inevitably forced companies – big and small – to fast-track their e-commerce capabilities much sooner. Since March, SimpliRoute has seen SMB clients – that never had digital sales – creating an online presence for the first time. Many of these companies don’t have the time or resources to develop their own technology to keep serving their customers. This makes SimpliRoute the perfect tool to navigate the current landscape. SimpliRoute’s large corporate clients – that already had an online presence – have had to double down on their e-commerce efforts due to the spiked surge in demand. As a result, they’ve increased the number of vehicles on the road, making it paramount that they invest in technological solutions to coordinate trucks, communicate with clients, and execute efficient last-mile deliveries.

The case of SimpliRoute’s recent success is what happens when preparation meets opportunity. The team has been flying under the radar building one of the strongest technological solutions in the region. They are now ready to scale, at a point in time when the world needs them more than ever. We have the utmost confidence that the SimpliRoute team, no matter the macroeconomic landscape, will continue to execute at a high level, taking their company to new heights. We are excited to have our CTO Victor Servin join their board and we all feel very lucky to be a part of their journey!

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