The unicorn story of Transporeon started in 2000 when four friends — Axel Busch, Peter Förster, Roland Hötzl, and Marc-Oliver Simon — founded the startup Transporeon just a few days after their final exams. Or in 2015, when Estonians founded Palleter, which just a few years later made a brave decision not to sign the investment agreement of €1M for a non-working business model. Or in 2017, when an AI-based transportation startup, Sixfold, was founded in Estonia as a happy-ending epilogue of Palleter. The truth is that unicorn building is tough, and the unicorn story of Transporeon consists of a number of exceptional prologues you are invited to follow with us.
Prologue #1: Palleter’s brave “No” to €1 million
Palleter was founded in Estonia in November 2015. Märt Kelder, former CEO of Palleter and co-founder of Sixfold, has told Palleter’s journey on Medium in 2017, just before starting with Sixfold.
Palleter founders were trying to improve the fragmented trucking market around three hypotheses. First, 25% of the cargo space is empty. Second, trucking companies are willing to pick up extra loads on vehicle routes. Third, trucking companies offer competitive pricing for such last-minute offers since available space in a moving truck is a perishable good — if you don’t sell it out, the opportunity is gone forever.
As good as it sounded, the idea has not taken off. After building the MVP (Minimum Viable Product) marketplace, in two months, the founders learned that all their core hypotheses were incorrect. Ready to stop the business, they still had a fully prepared investment agreement for 1 million euros, just waiting for their signatures. Instead of taking that money, the founders of Palleter chose to fold. “We felt it was the responsible thing to do given all our hypotheses were invalidated, and we were back to square one,” Kelder said.
Although the journey of Palleter ended, their brave “No” to €1 million was the right thing to say and led them to participate in a $2 billion exit six years later.
Lessons learned, wounds healed, they decided to build another startup named Sixfold eight months later.
Prologue #2: The rise of Sixfold
Estonian AI-based transportation startup Sixfold was founded by Märt Kelder, Tõnu Runnel, Magnus Hiie, Priit Haamer, Wolfgang Wörner and Volkert Gasche in 2017.
“If you order a belt for yourself from Amazon, as a private individual, it is generally quite convenient for you to follow the movement of the shipment. At the same time, large companies such as Coca-Cola, which sends out 1,000 truckloads of goods every day in Europe, do not have such an opportunity,” Kelder described the problem that Sixfold sets out to solve to Estonian business daily Äripäev.
To monitor companies’ supply chains, Sixfold adopted the technology developed by Palleter and offered it to business customers based on the new business model.
According to Äripäev, by the middle of 2019, Sixfold has created a platform that makes the flow of goods visible to large manufacturers and their customers and informs both of the delivery times of the goods in advance. With 40 employees, Sixfold has successfully contracted world-famous brands such as Südzucker, Saint-Gobain Isover, and Weig to use their platform.
Prologue #3: Sixfold partnership with Transporeon (and Estonia becomes unicorn’s R&D centre)
In April 2018, Sixfold announced starting a partnership with Transporeon, the largest logistics network in Europe.
At the time, Transporeon facilitated 50,000 shipments daily and was used by 1,500 shippers globally, including industry leaders in production and retailing. And Sixfold was working on a solution that makes shipments visible to all the supply chain parties. So far, visibility has been available only for the carrier — and even then, only across their own fleet. All other parties have relied on repetitive checkup calls for planning.
Prologue #4: “Never let a good crisis go to waste”
Winston Churchill’s famous saying, “Never let a good crisis go to waste”, is well rooted in Estonia. Estonian startup community used to organise hackathons to solve problems needing immediate response. Churchill’s saying has already transformed here: “We Estonians don’t know how just to stay still and do nothing in the midst of a crisis – we act and we hack!”
In 2020, the COVID-19 pandemic reached Europe. Sixfold reacted super quickly to the traffic crisis caused by the pandemic and launched a real-time border crossing map to avoid delays in international freight transportation. After a one-weekend hackathon, a solution was published — the Sixfold’s map, which connected all the trucks to one network in Europe.
From that moment on, the whole “weekend hackathon” affair went viral, bringing the company the attention of hundreds of thousands of people in the following weeks.
Sixfold’s map spread like wildfire among logistics professionals. Media, including Financial Times, NY Times, WSJ, and Reuters, started fueling it too, making the company’s name appear beside all the talk about sudden border problems across the EU. Screens showing this map ended up on the walls of the war rooms at various logistics companies. Hundreds of shippers started using it, including Amazon, Tesco and Nestle. Leading mapping and routing companies PTV, Trimble, and other logistics platforms started including Sixfold’s data in their services.
And then “the government” called. It turned out that — to act upon President von der Leyen’s priority to keep goods flowing across Europe — Sixfold’s data was just what the European Commission needed for policy enforcement and coordinating policy adjustments. Departments of Trade and Foreign Affairs from different countries reached out too.
This time, Sixfold said, „Yes“. After a super quick (no bureaucracy!) stint of work with a small list of partners, including Sixfold, European Commission announced the launching of the Green Lane project to keep the main transport arteries of Europe open. The effort is led by the GSA (the European Global Navigation Satellite System Agency responsible for Galileo — essentially the European version of ”GPS”). In contrast, Sixfold provides the underlying statistical visibility and other partners bring in interested stakeholders like border patrols and truck drivers to report their observations.
“Just a week earlier, we wouldn’t have believed that the public sector is about to become a new customer segment for us,” said Tõnu Runnel. Now, the hackathon brought the Green Lane project and three other big deals in a couple of weeks.
That’s how only a few days of intense brainstorming and development initiated from Estonia changed the course of the joint company and triggered the future unicorn exit and exit to a unicorn.
Transporeon’s unicorn exit
On December 12, 2022, the US technology giant Trimble announced the purchase of transport logistics firm Transporeon in a $1.98B deal. The transaction is expected to close in the first half of 2023, subject to customary closing conditions, including regulatory approvals.
Trimble is looking to expand into the transport tech market by acquiring Transporeon, which uses cloud-based software to plan logistics and cut empty truck volumes and carbon-dioxide consumption, and has a strong footprint in the European market.
“We have built a remarkable platform and sustained profitable growth to become a leader in this attractive market,” says Stephan Sieber, CEO of Transporeon.
Currently, Transporeon’s software platform provides modular applications that power a global network for 145,000 carriers and 1,400 shippers and load recipients with an integrated suite of best-in-class sourcing, planning, execution, monitoring and settlement tools.
Estonia is a world master in building unicorns
The Transporeon-Trimble deal was near to bringing a new unicorn to Estonia. But Estonia can now proudly celebrate an exit to a unicorn.
“Estonia is a powerful country. Not only we create unicorns, but Sixfold introduced totally new angle to us as a country and tech ecosystem,” says the President of the Estonian Founders Society, Kaidi Ruusalepp. “Estonia is the country that empowers unicorns. Our tech companies invent, design and create solutions that are valued by global players and more importantly — enable us to create unicorns in other countries. Sixfold is the first to kick off the new segment — empowering unicorns,” Ruusalepp notes.
The Estonian unicorn is defined as a 1 billion dollars valuated company with Estonian founder(s), headquarters or a significant part of R&D based in Estonia by the Estonian Founders Society, Invest Estonia and Startup Estonia.
According to that definition, both Sixfold and Transporeon almost fit the line. German Transporeon had a significant part of R&D based in Estonia. Basically, it is a former Sixfold that became the innovation centre for Transporeon a few years ago when the companies merged. Sixfold was Estonian-founded, headquartered and innovated in Estonia.
“The value of Transporeon increased by almost $1.5 billion during the time that we were there in the package with them for five years,” notes Tõnu Runnel, co-founder of Sixfold. “Our technology completely transformed Transporeon. And Estonia has Transporeon’s large and important development. centre,” Runnel notes.
However, Sixfold’s mergers and acquisitions (M&A) deal with Transporeon and later sale to Trimble peaks with a new German unicorn. Estonians once again have helped to build a unicorn.
Estonia is a world leader in unicorns per capita. So far, Estonia has been the birthplace of 10 unicorns: Skype in 2005, Playtech in 2007, Wise in 2015, Bolt in 2018, Pipedrive in 2020, Zego, ID.me and Gelato in 2021, Veriff and Glia in 2022. That’s 7.7 unicorns per million capita.
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