Israeli Freight Platform Freightos to Go Public Via SPAC

Israeli digital freight booking and payment platform Freightos will go public through a merger with special purpose acquisition corporation (SPAC)  Gesher Acquisition, the companies announced Tuesday (May 31).

The combined company will have a pro forma enterprise value of about $435 million, according to the companies.

According to the companies, the founders of Freightos were inspired by the effects of digital technologies on passenger travel, retail and lodging.

“Global freight moves the world,”  Zvi Schreiber, chief executive officer of the Freightos Group, said in a prepared statement. “Last year, $22 trillion worth of goods crossed borders, but we have all witnessed what happens when shipping doesn’t run smoothly, creating inventory shortages and increasing prices that challenge businesses and consumers globally. This presents a massive opportunity to digitalize one of the last large offline industries.”

Ezra Gardner, chief executive of Gesher, said in a prepared statement that Freightos produces “positive unit economics, high gross margins, an incredibly high growth rate, and impressive customer retention.”

Under the deal, according to the companies, the new entity will be called Freightos and trade on the Nasdaq under the symbol FROS.

Freightos stated in the deal announcement that it works with more than 10,000 importing and exporting companies, 3,500 freight forwarders and 200 carriers — executing in aggregate “hundreds of thousands” of international freight bookings every year.

Freightos also reported a combined $80 million in new capital commitments.

Qatar Airways will add to its existing investments with $10 million in new funding for the combined company. M&G Investments is investing $60 million. Composite Analysis Group, an affiliate of Safer Logistics, committed $10 million, according to the announcement.

The company’s investors prior to the new deal include FedEx Corp, SGX Group of Singapore and British Airways.

See also: Freightos API Embeds Logistics And Payments Into B2B Marketplaces

“Freightos is addressing an area of overwhelmingly unmet need in the global economy; fixing global freight. With its marketplace technology winning rapid commercial adoption, it is an ideal target for Gesher,”  Carl Vine, a portfolio manager at M&G, said in a prepared statement.

“We’ve created a kind of billing system that fits the freight lifecycle,” Freightos executive Ruthie Amaru told PYMNTS’ Karen Webster in an August 2021 interview. “We’ve had to work very hard to figure out how to do the back-to-back invoicing. A lot of our IP has to do with figuring out how to do that in a way that’s safe and trusted and regulated.

“If you’re going to identify a manufacturer somewhere in the world, and you don’t know how much it costs to ship their goods to you, that’s a lot of uncertainty,” Amaru added. “So, plugging in our platform, which provides certainty on freight, gives you a guaranteed price. The ability to know that you can actually ship it, plugged into the ability to find and source manufacturers around the world, suddenly it gets to be very powerful.”