Investing in Forto, a Leading Digital Logistics Platform Powering Embedded Trade

In some ways, our modern world has never been more connected. Messages are sent around the planet with the click of a mouse, data is collected instantaneously, and even physical goods traverse the hemispheres in a matter of hours. Across every industry, digital technology is revving up the rhythm of international business—but wherever antiquated analog practices remain, that high-speed environment only heightens their constrictive effects.

This is especially true in the freight forwarding industry, the massive ecosystem of cargo carriers, ports and customs agencies, logistics coordinators, and more that underpins global trade. Although the freight forwarding market is expected to grow to $207B by 2026, the industry is still highly fragmented and marred by opaque, manual processes. Companies along the supply chain may take up to 100 hours to book and start a shipment—coordinating everything via emails, phone calls, and even faxes—only to be left with limited ways to monitor that shipment after it leaves port. While many freight forwarders want to update their systems with digital capabilities, they encounter hurdles such as legacy IT infrastructure, disparate and siloed data, workforce retraining, and industry consolidation, which leads to a network of patched-together infrastructure systems. As a result, digital transformation is often too cumbersome and costly to execute.

In partnership with Citi Treasury & Trade Solutions (TTS), we have been closely watching these challenges from the vantage point of Embedded Trade—our thesis that digital innovation will help the physical and financial sides of the global supply chain converge, driving increased integration of trade logistics with financial services. Through this lens, we have seen that analog practices hamper economic activity not only for purchasing and shipping along the supply chain, but also for accessing adequate financing to fuel operations. That makes it difficult for many small and medium-sized enterprises (SMEs)—particularly those in emerging markets—to support their trading activities, and is a primary reason for the estimated $1.5 trillion worldwide trade finance gap. For larger corporations, supply chain disruptions have become top-of-mind in light of COVID-19 and the ensuing global shipping crisis that has rippled throughout the world.

These long-standing problems require novel solutions, which is why Forto immediately stood out to us as a game-changer for global trade. Forto’s end-to-end digital shipping platform offers multimodal freight forwarding, order management, and shipment tracking for corporate customers around the world. Built from scratch in a tech-first approach to provide the transparency, communication, and real-time quoting and monitoring its clients need, Forto brings all aspects of the process together under one digital “roof”—including price quoting, booking, and ancillary services such as customs, warehousing, insurance, and financing products. By automating every step of the shipment process, Forto allows its clients to realize value through convenience and reliability and works to reduce the broader inefficiencies and fragmentation that have long plagued the global shipping industry.

Every feature that Forto has developed stems from its vision to completely digitize global trade and connect disparate parties and data silos—a vision that is consistent with Embedded Trade. Co-founders Michael Wax and Erik Muttersbach built Forto for the “shipper of the 21st century,” combining logistics expertise and innovative technology to create a solution that empowers users to own their entire supply chain. Over the years Forto has assembled a C-suite of strong technical talent and senior industry experts, bringing in senior leaders with extensive experiences in logistics and financial services to complement the founders’ fresh “outside-in” perspectives. That crucial piece of the puzzle is helping the team reach its aspiration of making Forto the true one-stop-shop for importers and exporters the world over.

Forto is already well on its way to realizing its ambitious vision: after tripling in growth every year since its founding in 2016, it has become the leader in the digital freight forwarding space with over 2,500 clients in more than 50 countries. It was the first to market with tech-forward features such as its integrated Order Management System and dynamic, real-time pricing engine—features that its competitors are now seeking to follow. The company has seen significant traction among digital-native businesses that prefer the convenience of its self-service model, and during the pandemic its nimble innovation helped it serve a swath of new customers whose legacy providers couldn’t keep up. The network effects from this growth will help Forto expand its reach and create even more value for its client base and the industry as a whole.

That is why we’re excited to announce our investment in Forto’s recent $240 million Series C round, led by SoftBank’s Vision Fund. Forto’s continued growth and shared vision for Embedded Trade make this an exciting partnership for Citi Ventures and TTS Trade.

For more information, contact Luis Valdich at luis.valdich@citi.com.