O’Melveny Advises Kayne Partners In FreightWaves InvestmentJuly 24, 2020
FOR IMMEDIATE RELEASE
CENTURY CITY—July 24, 2020—O’Melveny represented Kayne Partners, the growth equity group of Kayne Anderson Capital Advisors, L.P., in its investment in FreightWaves, the leading provider of freight data and analytics.
The transaction was announced today.
Kayne’s investment is a minority, non-controlling investment that will support strategic and sustainable growth in FreightWaves. Kayne is active in the FreightTech space, with investments that include transportation software companies such as DriveWyze and Decisiv.
Kayne Partners, headquartered in Los Angeles, is a leading provider of capital and connections to privately held, high growth, enterprise software and tech-enabled services businesses in North America.
The O’Melveny team advising Kayne Partners was led by corporate partner David Smith and included counsel Melissa Wright and associate AJ Talt.
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FreightWaves issued the following:
FreightWaves raises $37M in new growth financing
Friday, July 24, 2020
FreightWaves, the leading provider of freight data and analytics, has raised $37 million in two rounds of minority investment since April. The latest round was led by Kayne Partners Fund, the growth private equity group of Kayne Anderson Capital Advisors, L.P. Kayne Partners Fund has committed $30 million to accelerate FreightWaves’ growth. This round puts the total capital raised by FreightWaves at $75 million.
Kayne Partners Fund’s investment is a minority, non-controlling investment that will support strategic and sustainable growth in the company. Existing management, led by founder and CEO Craig Fuller, President George Abernathy and CFO Spencer Piland, will continue to lead the company through the next stage of growth.
Kayne Anderson Capital Advisors, based in Los Angeles, is a leading multi-strategy alternative investment firm, and member of the PEI 300 (list of the world’s biggest private equity firms based on total capital raised over the previous five years) with over $29 billion under management.
Kayne Partners Fund joins other venture investors
Kayne Partners Fund will join venture investors including 8VC, Fontinalis Partners, Revolution Ventures, Hearst Ventures, Prologis Ventures, Story Ventures, and Engage Ventures in supporting the growth of FreightWaves, which is focused on building a fast-growing SaaS and market data business that services the $9.6 trillion global logistics industry.
“We are excited to welcome Kayne Partners Fund to the FreightWaves journey. We met with dozens of investors over the past year and felt that Kayne Partners Fund would be the best partner for FreightWaves’ next stage of growth. It brings diversity to our board and provides us with capital to pursue strategic growth initiatives,” Fuller stated.
Kayne Partners Fund Managing Partner and Co-Head of Growth Equity, Nishita Cummings, will join the FreightWaves board.
“We are thrilled to partner with Craig, George, Spencer and the rest of the FreightWaves team to further accelerate the company’s growth. FreightWaves’ SONAR SaaS solution has already begun to redefine how decisions are made in the logistics space, and we look forward to supporting the team in expanding a product suite that customers throughout the freight landscape increasingly rely on to successfully manage daily operations,” said Cummings.
Kayne Partners is active in the FreightTech space, with investments that include transportation software companies such as DriveWyze and Decisiv.
FreightWaves financial performance builds
In the first half of 2020, FreightWaves grew top-line revenues by over 50% over the first half of 2019. More remarkably, the 2019 number included revenues from two FreightWaves LIVE events that did not take place in the first half of 2020. Without its community events segment, FreightWaves more than tripled revenues year-over-year.
“Community and events like FreightWaves LIVE were more than 50% of our revenue in the first half of 2019,” Fuller explained. “With COVID-19 forcing us to cancel FreightWaves LIVE in May, we weren’t able to host our bi-annual event and experienced a significant impact to top-line revenues. The good news for us is that we had been building an over-the-top streaming TV network that was able to carry the FreightWaves LIVE content and experience into a virtual format. At our planned Atlanta event, we had expected to host more than 2,000 industry guests, but with the virtual offering of FreightWaves @HOME, we served more than 90,000 streaming participants over the three-day experience,” Fuller stated.
FreightWaves TV, the world’s first daily TV streaming news network dedicated to logistics and supply-chain, is now serving an audience of over 25,000 daily viewers. FreightWaves TV has 12 weekly shows that cover topics ranging from freight market updates (FreightWaves NOW), discussion about trucking spot rates (On the Spot), sales and marketing techniques (Put that Coffee Down), general content about news and trends that impact trucking (What the Truck?!?), and a fireside chat between FreightWaves’ founder and other executives in the logistics industry (Fuller Speed Ahead).
FreightWaves’ growth in the past year has been primarily driven by SONAR, the company’s SaaS platform, and the company’s media business. Both these units have grown over 250% in the first half of 2020 compared to the first half of 2019. SONAR provides the fastest and deepest data, intelligence and analysis in the freight market. The FreightWaves media platform offers online, video and podcast news and context for the global freight and logistics markets.
SONAR is a freight market analytics dashboard that is often compared to a financial market software system like the Bloomberg terminal or Refinitiv’s Eikon offering. The subscription-based offering helps transportation and logistics providers, shippers, and financial traders and analysts gain unprecedented access to real-time market data on the global logistics market. Most of the data on the SONAR platform is proprietary and offered exclusively by FreightWaves.
Logistics companies use SONAR to price more accurately, while shippers use it to benchmark their freight rates and supply chain performance against the overall market. Hedge funds and other financial firms use SONAR to get real-time data and analytics on demand trends throughout the domestic and global economy. While the platform is just two years old, SONAR has around 400 companies that depend on the platform daily to make decisions about their transportation and logistics exposure and spending.
2020 is a pivotal year for FreightWaves
Kayne Partners Fund’s investment comes at a pivotal time for FreightWaves. The fast-growing SaaS and data analytics company, has proven its product-market fit in the freight ecosystem and is at a key inflection point in its growth trajectory, gaining increasing scale and capital efficiency.
“Earlier this year, we pivoted the business from blitz-scaling towards sustainable growth. Even though COVID-19 had an impact on some of our revenue streams, we are accelerating past our profitability targets and are reinforcing strong fundamentals in our business model,” Fuller explained.
The Kayne Partners Fund’s investment comes after an unreported insider $7 million investment round that took place in April. With FreightWaves experiencing a strengthening financial position and improving financial metrics, FreightWaves did not pursue funding from the government’s Paycheck Protection Program. Rather, the company’s leadership chose to raise funds from existing investors: 8VC, Prologis Ventures, Fontinalis, Hearst, Revolution, Ascend VC, Pritzker Venture Growth Capital, and Craig Fuller.
FreightWaves plans to use the additional capital for growth initiatives, including product development and potential strategic acquisitions.
About Kayne Partners Fund
Kayne Partners, the Los Angeles-based dedicated growth private equity group of Kayne Anderson Capital Advisors, L.P., is a leading provider of capital and connections to privately held, high growth, enterprise software and tech-enabled service businesses in North America. Kayne Partners seeks to partner with driven entrepreneurs and provide capital to high growth companies at a transformative point in their life cycle in the following industries: security & compliance, supply chain & logistics, financials, business process automation, healthcare, and media & telecom. Kayne Anderson Capital Advisors, L.P. is a leading alternative investment management firm focused on niche investing in private equity, infrastructure, real estate, and credit. Kayne manages over $29 billion in assets and employs 375 professionals in five offices across the U.S.