After Uber partnership, Cargo raises $22.5 million to scale its in-car commerce service globally
In-car commerce startup Cargo has raised $22.5 million in a series A round of funding led by Peter Thiel’s Founders Fund, with participation from Coatue Management, Aquiline Technology Growth, CRCM Ventures, Rosecliff Ventures, Kellogg’s Eighteen94 capital, RiverPark Ventures, and a series of notable individual investors, including Zynga founder Mark Pincus and Def Jam Records’ CEO Paul Rosenberg.
The news actually leaked earlier this week via an SEC filing, but Cargo officially announced the news today, as well as revealing how it plans to spend the money.
Meals on wheels
Founded out of New York in 2016, Cargo partners with brands across confectionery, electronics, cosmetics, and more to offer ride-hailing passengers access to goods — including chocolate bars and USB cables — during their trip. For most of its short history, Cargo has worked as an unofficial supplier to drivers within the ride-hailing industry, doling out transparent cases in which to display goods to passengers. The rider can pay using the usual array of mobile payment services, such as PayPal or Android Pay.
Back in July, however, Cargo entered into an official partnership with Uber to become its exclusive in-car commerce provider globally.
Cargo first launched last summer in New York and Boston before expanding its coverage to Chicago and seven other cities in the following months, and it now claims 12,000 activated drivers.
The company had previously raised around $7 million in financing, most of which arrived via a follow-on seed funding round earlier this year from big-name investors that include CRCM Ventures, Kellogg’s VC fund Eighteen94 Capital, and Techstars Ventures.
With another $22.5 million in the bank, Cargo said it plans to continue growing domestically and internationally. Indeed, in addition to its tie-up with Uber, Cargo also recently struck a licensing deal with Grab, the Singapore-based e-taxi company that recently merged with Uber to consolidate the Southeast Asian market, which resulted in the launch of a new in-car retail service called Grab&Go in Singapore.
Brands
Selling goods to passengers is certainly a sensible way for drivers to increase their revenues — after all, Uber has faced mounting criticism over the amount its drivers take home after expenses and taxes.
Cargo earns money through selling the products, while drivers earn a flat 25 percent commission on each paid sale, plus a $1 base commission for every passenger who orders from a Cargo box. Drivers can also receive payment when passengers order free samples, something that feeds into Cargo’s broader partnerships with brands such as Coca-Cola, Kellogg’s, Red Bull, and Mars Wrigley.....MUCH MORE
