Ryder Looks to Advance Tech With Venture Capital Fund
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Ryder System Inc. is working to advance its technology and forge new partnerships with the launch of its corporate venture capital fund, the company detailed Nov. 2.
RyderVentures was created to invest in startups that are tackling disruptions in the supply chain by developing new technologies and business models that promise advancements in the logistics and transportation industries.
“In evaluating startups, we’re looking for products and solutions that have strong potential to be transformative for our business, our customers’ businesses, and ultimately the industry as a whole,” Mike Plasencia, group director of new product strategy, told Transport Topics.
Plasencia
RyderVentures, first announced Oct. 27, is targeting $50 million in investments over the next five years. Ryder already is looking at potential partners to invest in but isn’t divulging details.
“There are a lot of new solutions being developed, but we really want to filter through all of that and find those that will lead the industry forward in a can’t-live-without-it kind of way,” Plasencia said. “We’re also looking for opportunities where our experience, scale and support, along with our capital, can shift the balance from simply picking winners to helping create winners.”
Ryder has long focused on advancing technologies and has partnered with venture capital funds to support startups. It has even launched a startup with truck-sharing marketplace COOP.
RyderVentures will focus on e-commerce fulfillment, asset sharing, next-generation vehicles, automation and data analytics.
“One of the areas where we see disruption happening is asset sharing,” Plasencia said. “With automation, I think what everyone sees is warehouses. There is lot of tools there. Everything from robotics in the warehouse to pickup operations. Really, things that would support our labor challenges. Within next-generation vehicles, there are a lot of changes with vehicle technology. Everything from electric vehicles to autonomous vehicles.”
Ryder is a supply chain, dedicated transportation and commercial fleet management solutions company. It doesn’t manufacture trucks, so its venture capital fund primarily will focus on technologies that support trucking operations.
“With next-generation vehicles, we really see a lot of activity and innovation coming with electric and autonomous vehicles,” Plasencia said. “So what are the products and services that will support these new technologies and will enable the best solutions for our customers?”
Plasencia expects to see many new players come into that space beyond those that are just developing the vehicles. He noted it’s about understanding those technologies and seeing where there are valuable partnerships. That includes long-term investments into startups that are thinking ahead of the curve.
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“For some of these long-term ones, it’s just an opportunity to create those partnerships early and help them steer their technologies and business models so that really they are best-positioned for us and our customers to utilize them,” Plasencia said.
RyderVentures is the result of the lessons learned from working with venture capital funds and startups in the past. Ryder gained experience choosing startups as well as the due diligence that comes from looking in different marketplaces and technology spaces.
“We’ve been on this startup journey now for several years,” Plasencia said. “We’re very confident now launching the fund. We really saw this as the next step in our new product strategy journey.”
Ryder making direct investments also allows the company to better align its incentives with the startups. It also hopes to identify emerging technologies earlier. Ryder is aiming for startups with strong growth potential but that are in need of its transportation and logistics expertise. And like previous partnerships, Ryder will be able to evaluate and test the newest technologies.
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“Ryder is a pretty big platform for startups to test out and prove their products,” Plasencia said. “With over 50 million square feet of warehouse space, 50,000 customers and 290,000 vehicles in the management, it’s a pretty big landscape for them to test out their products and to roll them out once they are successful.”
Plasencia noted that in the past, these partnerships went through a three-stage process from evaluating the technology solution, to piloting the business and then to rolling out a full solution. It would start small and scale up over time. RyderVentures is likely to take a similar approach.
“We’re going to evaluate it from both the financial and strategic side,” he said. “We’re making investments, and we expect to pick and make winners in this space. So we expect it to be financially viable.
“Then from the strategic side, we’re really doing this because we really want to create those partnerships and discover those technologies that are really going to drive a competitive advantage for us and our customers.”
Ryder System is the parent company of Ryder Supply Chain Solutions, which ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 5 on the TT Top 50 list of the largest logistics companies in North America.
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