Visibility and risk management platform Paxafe announced it has closed on an additional $1.5 million in capital led by early-stage fund Venture 53 with participation from Value Chain Ventures, project44 founder and CEO Jett McCandless and Peter Rentschler, CEO of supply chain business consulting and software development firm Metafora, formerly known as CarrierDirect.
This comes after recently raising its seed round in 2021, led by Ubiquity Ventures and participation from Greenlight Reinsurance, Fintech Venture Fund, Northwestern Mutual and others.
Paxafe, founded by CEO Ilya Preston and CTO Ashok Seetharam, saw a gap in the FreightTech visibility market. While companies were providing the software and hardware pipelines to secure shipment data, they lacked machine-learning-powered software to learn from those use cases, Preston explained to FreightWaves.
“We contextualize supply chain data,” said Preston. “Essentially, we apply machine learning to auto-diagnose the root cause of adverse events, and what can be done to prevent them from happening.”
He said Paxafe builds cause and effect relationships between Internet of Things sensors, third-party data and enterprise resource planning data “to provide a robust truth and understanding of how adverse events occur and why they occur.”
|Funding amount||$1.5 million|
|Funding round||Seed round (2nd)|
|Lead investor||Venture 53|
|Secondary investors||Value Chain Ventures, Jett McCandless, Peter Rentschler|
|Business goals for the round||Scale product development and teams|
|Total funding||$5.5 million|
With this information, Paxafe can provide predictive models and workflow automation tools for its customers to predict not just time of arrival, currently operating at a 95% accuracy rate, but also advanced temperature prediction.
According to the company, its software has the ability to predict temperature excursions and deviations hours before they will occur. This functionality sits as a part of their Advanced Temperature Module, which houses a series of predictive APIs and workflow automation tools that help digitize and automate the manual processes surrounding temperature management.
For the pharmaceutical supply chain, which sees about $35 billion worth of annual losses due to temperature control issues, these predictive solutions could solve real, lifesaving challenges.
“There has been a tremendous surge in time-critical business during the pandemic and customers have clearly witnessed the value created by Paxafe. … Customers are willing to pay more for shipments that are predictable with less chance of damage or loss,” said Pat Martin, general partner at Venture 53.
Preston explained that its cold chain shippers have seen value from Paxafe’s ability to contextualize the refrigerated niche, providing an adaptive shipment risk score that considers real-time and historical carrier and lane behavior, weather, traffic and other relevant patterns.
“As a hardware-agnostic visibility provider, Paxafe has developed some deep capabilities around digitizing and automating temperature management for the cold chain industry. These capabilities have unlocked some early traction with big names in health care and food and beverage,” said McCandless. “Rather than compete directly with today’s leading IoT providers, they’ve created a platform with advanced prediction and automation features that are not only accessible by shippers and 3PLs, but by other IoT device manufacturers.”
Paxafe uses its proprietary capabilities to help cold chain shippers and service providers make their internal E2E control towers more intelligent. Paxafe platform – Contxt – helps enterprises reduce loss, improve operational efficiency through automation and optimize supply chain decision-making.
Beyond the cold chain which includes healthcare and food and beverage enterprises and service providers, Paxafe has also found traction and strong demand in the manufacturing and oil & gas industry.
With its recent capital infusion, the company plans to continue applying and expanding its machine-learning models to its targeted markets while doubling its workforce throughout the current quarter.
“Paxafe is one of few FreightTech companies actually using machine learning to generate better outcomes for its customers. Stringing together data from telematics, ERPs, transportation management systems and others to identify at-risk shipments adds a layer of maturity to the visibility data available in the space today,” said Rentschler. “Paxafe has proven product-market fit; now it’s a matter of pouring gas on the fire to scale. I’m excited to be a part of that.”
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