Chattanooga Attracts Startups as City Vies to Be Logistics Capital
Three technology-based logistics companies are moving to Chattanooga, Tennessee, after completing a 12-week accelerator program hosted by the founders of Access America who are eager to make Chattanooga the logistics capital for technology.
Two startup firms, WorkHound of Des Moines, Iowa, and Skupos of San Francisco, are moving their headquarters to Chattanooga after spending the summer working with local mentors and raising investment funds here through the Dynamo program. Another startup firm that participated in Dynamo, the Dublin, Ireland-based Locatible, plans to open its North American headquarters in Chattanooga.
"We're working to put Chattanooga on the map as the capital of logistics, supply chain and transportation technology," Santosh Sankar, the director of the 12-week Dynamo project, told hundreds of investors, entrepreneurs and others during the Dynamo Demo Day on Oct. 4 at the Tivoli Theater.
Sankar said the Dynamo accelerator program was born last year "with the audacious goal of supporting exceptional founders focused on transforming an industry worth over $4 trillion." The Dynamo accelerator worked this summer with 10 tech businesses in the logistics industry, ranging from companies finding ways to better pinpoint ocean freight around the world to businesses finding new ways to arrange short-term warehouse storage.
The backers of Dynamo — Ted Alling, Barry Large and Allan Davis — made a fortune in freight and logistics forwarding at Access America and have invested some of those funds back into helping other businesses get started and grow in Chattanooga.
Dynamo leaders believe their program is the only logistics- and transportation-focused accelerator in the country. Running as a "sibling" to the accelerator, the Dynamo fund is an $18 million early stage fund investing in logistics startups. Most of the funding came from Chattanooga-based individuals and investment entities, several of which committed $1 million or more.
WorkHound, a system that lets longhaul truckers vent their on-the-job frustrations anonymously via smartphone, is moving here from Des Moines, Iowa, and expects to grow its business by helping trucking companies cut their costly employee turnover.
WorkHound's software compiles and analyzes complaints so companies can do a better job of retaining truckers — a big money saver in an industry that Farrell said sees 95% of drivers quit their job annually to work for another company. With some 2 million drivers on the road, employee turnover costs the trucking industry $15.5 billion, annually, he said.
"Trucking is just the start," said WorkHound co-founder Max Farrell, who sees a market for his "employee engagement software" in other professions, such as nursing.
Skupos, a San Francisco-based startup that began nine months ago to serve the convenience store industry, also is relocating to Chattanooga based upon its summertime experience in the Dynamo Accelerator. Jake Bolling, co-founder and CEO of Skupos, said the business has contracts to serve more than 200 stores in the San Francisco Bay area but he sees greener pastures in the Southeast.
"The Lamp Post guys are obviously great not just in the way they know the industry but in how they have drawn the community in and brought great mentors and programs together to help connect these startup businesses with customers and investors," Bolling said. "Chattanooga is really the crossroads for a lot of the logistics industry."
Another Dynamo participant, the Dublin, Ireland-based Locatible, plans to open its North American headquarters in Chattanooga. CEO Ronan O'Coigligh said his startup company uses a magnetometer, a device that senses the earth's magnet field and is used in smartphones, to track the location of items inside warehouses down to five centimeters in real time.
That can save companies millions of dollars over time, O'Coigligh said, since lost items in a huge warehouse can delay trucks from leaving on time and cause other problems.
"There's a great vibe here," O'Coigligh said of Chattanooga.
