 Good afternoon everyone. You just heard about vertical logistics sending rockets into space. So now we're here with David to talk about horizontal logistics and sending freight into other markets in Europe, which may be just as complicated as sending rockets into space. We'll find out. So great to be here. I think the place to start, you know, many of the startups that we read about, they're in software, especially AI these days, you're in a very difficult field of logistics, moving trucks and people around. Tell us a little bit about how you got started in this field. Yeah, it's indeed very difficult to come after rockets, but as a child, rockets were cool, but also trucks were very, very cool. But many years later, I found again the passion towards trucking, was doing an MBA project where I just started working with a few classmates on a business idea and that then evolved into a digital freight forwarding company in Uber for trucks. This is how I describe it to my grandmother with thousand employees and sending trucks every day across Europe. So when you were describing sender to me yesterday, Uber for trucks, I was thinking about, you know, in those early days, trying to sign up drivers in different markets, you know, this is a very old industry. What is it like kind of being a startup and trying to sign up these clients? It was definitely steep learning curve. When I started, I thought, okay, let's give every driver an app and then we have end-to-end visibility and, you know, we can focus on more important things. It turned out that it's much more difficult. The average age of a truck driver in Europe is 48 years old. He or she has a private smartphone that typically employees of a small trucking company. They don't want to use that private smartphone for the boss that they might not like. And then at a certain point we said, okay, let's send them smartphones with a SIM card and the app installed, so nothing can go wrong. And it turned out that sometimes at night when they do certain stops, they take out the battery, the SIM card, and then good luck next morning to put everything back so that it works. So it was a steep learning curve. By now we do interact with both shippers and carriers in different ways and learn how important also the topic of tech adoption is in addition to tech development. And what were the conversations like with investors in those early days when you were telling them, look, I'm going to digitize trucking. You won't believe it. Yeah, we were lucky because there was a big role model coming up, which was Uber Freight in the US. So we could always refer to, hey, Uber is doing it in trucking. We're doing exactly the same here in Europe. And until Uber Freight came to Europe, everything was great. We could tell a very interesting story backed by also some growth behind that. But when they came to Europe, we struggled a little bit. Yeah. And so kind of just to fast forward very quickly to today, just tell us a little bit about the size and scope of Sender now. Yeah, so we raised a lot of money much more than I thought we would raise over 350 million. We're now 1,000 employees across 11 offices. Did a couple of big transaction. Among others, we ended up acquiring Uber Freight Europe, the European operations, just also to make sure that our investors were still very excited about our journey. Yeah. And I'm now facing a very interesting evolution of the industry with first electric trucks hitting the roads right now and then eventually autonomous trucks that might be closer than many of you think, which will require a lot of players in this industry to evolve the business model. Yeah. And again, you know, I think in terms of SaaS like software businesses, people are familiar with this idea of like hitting an inflection point where your sales or your business kind of just starts, the economies of scale kick in. Was there like an inflection, I mean, for your inflection point, like was there a moment where you felt like things really turned? So actually, it's this year is the first time where we felt that inflection point. When we look at the carrier tech adoption, we always struggled to have carriers fully intact digitally with us. Again, truck drivers for the eight years old, our first counterpart is typically the dispatcher sitting in an office and a dispatcher is typically a retired truck driver that does dispatching for a couple of years before fully retiring. And so when we came with our solution, everything is quicker, faster. You just have to sign up, authenticate yourself, and then you can interact with us digitally. They kept pushing back because the phone was ringing and John, with whom they've been working for 20 years, said hey, just send me a WhatsApp on email and I'll confirm the order immediately. So it was tricky, but this year for the first time, we saw a tech adoption that doubled. Now we're close to 90% on the carrier side for the first time, which means that 90% of the loads are fully booked digitally, almost doubling with respect to last year. And this is a very important inflection point for us because it's now where we can really have our flywheel spinning much more autonomously without us always helping it with maybe a few emails and phone calls in the background. Yeah. And you have a lot of avenues for growth, I guess, right? It's like, how do you think about new markets, new technologies that make your business more efficient? So there are a couple of things. First, we understood that in order to succeed in other models, such as services and software, we first have to get the freight forwarding right. Logistics is still a people's business, so you first have to build a trust relationship with these more old-school counterparts, have them use the technology to run what they already know, right-leaning trust, and only then you can open up the opportunity for other things, such as fuel cards, for example. We can bundle the puthizing power of all of these small trucking companies, get better rates, and share them with our carriers, make them more profitable while also taking a small card, getting a lot of data in the process, which is super interesting. Then you're in the payments business, which is everyone's favorite. And we also realized that the biggest pain point for trucking companies is cash flow. 70% of all trucks are owned by companies with fewer than 10 trucks. They look at the bank account and check how much cash do I have to pay salaries, maybe by fuel bill, and this is when we realized that factoring is a super interesting option. That's why we started allowing carriers in Germany and Poland to upload invoices that they sent to our competitors so that they can get the money within three days through a factoring solution in that process. And it was super, super interesting because we did not only increase loyalty and retention, but we also get access to very interesting data because one-third of all the truck drivers that uploaded the invoices allowed us to use the data that we could collect from these invoices, making it even more interesting for us as a business opportunity. Very interesting. So you've done a few joint ventures, and there was the Uber Freight deal. You acquired Uber Freight's Europe business, I guess three years or so ago. How did that deal come about, and what has it been like kind of integrating that business into yours? It's probably an experience I'll never forget. As mentioned, Uber was always the role model in the US. We looked up and always used to tell our investors what we were doing when they came to Europe. As mentioned, everyone was a bit scared. And then we did our first acquisition, a French company called Everroad, and why we were at the North Tree, and in Germany it's a long process, a few hours at the North Tree, Uber Freight reached out and said, let's talk about the partnership in Europe. And I thought, interesting. They now know that we are significantly bigger than they are, especially through this acquisition. Maybe they're interested in acquiring us. But then it turned out, after scheduling your first call, that they're actually interested in selling the European business. And it was a very interesting time frame in which they were interested in doing so, because it was a time where the parent company, Uber, had to get to profitability and had to divest from all the businesses where they were not number one. And the time where Uber Freight raised money externally, so just for the freight business. It was a nine-month period where we really took the opportunity to acquire the European business, which for us was a game changer, not for the market consolidation, because in logistics it's such a fragmented market that top five players have a combined market share of 7%. But because it allowed us to elevate the proficiency, the maturity of our organization. When the managing director of Uber Freight joined Sender as COO, he described Sender as a group of people in their teenage years. We were running around with a lot of passion, a lot of energy, everyone's helping the other out and that's why things were moving forward in a good way. But there was when we were 200 people, then we scale to 1,000 people and that is just a different level of complexity that requires better processes, structures. You really have to know what the organization is doing in the different parts. And this is when Uber Freight management that came in allowed us to introduce all of these elements that allowed us to keep that growth going. And what is kind of the Sender M&A strategy? So we started with acquiring digital players and it helped us a lot on the fundraising front because I know there might be a few investors among you, but investors like when there's a clear market leader to bet on, just makes the story easier to explain all the internalities so that helped. But we quickly also realized that maybe that's not the most efficient use of capital, even if we paid with mostly with shares, but it was that M&A was still a very interesting opportunity because to succeed in our business, you need a lot of density. You need a lot of loads in the same geography to optimize them, to connect them, to do these empty kilometers. This is when we realized, hey, wait a moment, there are a different type of M&A opportunity out there, which are a family owned brokerage, also asset owned, they also don't own trucks, but they have been doing what we have been doing just with two phones and connecting the dots in that way. And we said, these are companies we could acquire, put them on our platform, the technology, have no technology, and allow the talent that we would bring on to do more, more efficiently and create synergies in the process because we would add volume to our platform. And this is what we did and we acquired a couple of these family owned businesses, companies that are typically too small for private equity, too big for a neighbor to take over when the owner of this business wants to retire, brings completely different challenges when it comes to integration than Uber Freight and Everroad, but our businesses that are profitable and that we can make more profitable. I say yeah, merger integration is its own kind of topic, tricky topic. The shipping market has been very turbulent, kind of through the pandemic, coming out of the pandemic. Where are we now in the European freight market? So it was indeed very turbulent and why I think it was visible was when you look at the rates of containers from Asia to Europe, we don't cover that segment as a sea freight, but that's why I think you really see how consumer spending impacts logistics rates drop from around $10,000 to less than $1,000, which is meaningful. Luckily we are in trucking, so it's a bit less impactful. An interesting thing I learned is that you can determine how the economy is developing already a little bit before, but just seeing the flows of orders, we can really see when our warehouses are being replenished and when not. Unfortunately, we just did the exercise last week and seeing how is Q4 looking like towards the end of the year, to see a Christmas, let's say as strong or stronger than the past few months and there were very few signs of positive recovery, so unfortunately we don't see it to the end of the tunnel. Yeah, I know Black Friday just happened last week in the U.S., so we're in peak season for you, but it is a very difficult environment for consumers, and I'm sure that plays into your business. But there are a few other really interesting dynamics in the market. You told me that there's, I think, 400,000 kind of missing truckers in the market. How does that impact your business and is it part of your role to try to get more people in the market? I think that one of the biggest risks that our economy will have in the next five to seven years is the lack of truck drivers, and I think a lot of people underestimate the impact of this. As you said, 400,000 truck drivers are missing today. We could employ them tomorrow. Now, since demand for good and therefore transport decreased a little bit, right now it's softened a little bit, but if you look at the demographics of truck drivers, it's an aging population. In Germany, two-thirds of all truck drivers will retire in the next 15 years, and if you look at how many new truck drivers come online, there's very, very few. Work-life balance is becoming more and more important. I can tell you that driving a truck is a difficult job. You spend sometimes two, three weeks at the time in your cabin, sleeping there, waking up every night at a different time, and now even talent from Eastern Europe that was filling in in Western Europe is also no longer interested. Young people can go to a restaurant. I live in Berlin and restaurants still open three days or four days only per week because they don't find the people. As long as this is the case, there are job opportunities, and this is why I think that sooner or later, I would say in the next five to seven years, we're going to see again on the big newspapers news that says there's no milk in supermarkets because they're not enough truck drivers to deliver that. If it sounds familiar because a couple of years ago we had exactly the same headlines in the UK, was driven by Brexit and Corona, but exactly the same effect will come back also in continental Europe. Living in London, I absolutely remember those headlines. I feel like even just in the last year, I've read stories about some of the major US retailers are paying their truckers like six figure salaries. So it's also kind of impacting the costs in the industry and pay. Absolutely. This is the US market and that's why it's much more volatile. People just get paid so much that they're more entrepreneurial. They lease a truck and go online in Europe. It's more constant because Europeans are less entrepreneurial, more afraid to fail, and that's why most of the truck drivers in Europe are also employees and not these owner operators, these entrepreneurs. In the US, that's why the European market is much more stable in the US. Because of the future of logistics, what are you doing in fields like EVs, autonomous driving, to prepare for that? There's a lot of change and the two technologies you just mentioned, electric trucks and autonomous trucks will fundamentally change the way this industry works. To describe what I mean with that, I suggest we all go into a time machine and go into a future where autonomous trucks can travel autonomously end-to-end, passing by small schools with small kids. It doesn't matter when you think that future is in 20, 30, 40 years. Now, in that future, a lot of things will change because the 70% of all the trucks that currently owned by companies that have fewer than 10 trucks will lose the reason to exist. These mom and pop shops will not be able to buy an autonomous truck. The property of an autonomous truck will be able to play with the manufacturer, the operator. Small companies won't have to hire and manage a driver. It's an autonomous truck and they won't be able to optimize costs because they won't be able to change the oil at the neighbor shop. It's a high-tech electrical machine. In the next, whenever this future comes, 20, 30, 40 years, you're going to see that 70, probably 80, maybe 90% of the trucking market, which is a huge market, will be shifted to be reinventing. So, if you ask a truck manufacturer such as Scania, our largest investor, who are your customers in that future? They really have big, big question marks because they have to reinvent their model. Will it be just being an asset manufacturer? Probably it's not going to be enough to stay competitive. Will it be an operator selling at something at a kilometer rate? Will it become a logistic provider? These are exactly the questions they have to answer. And for me, that future, and I said earlier, is not too far away because once we hit that breaking point that I mentioned earlier, where we have this big news, no market supermarkets, this is when policymakers will realize, oh, wait a moment. I actually can put autonomous trucks on the highway from highway entry to highway exit, maybe on a separate lane with some sensor just to make it safe, and then I protect the last trucking mile from the exit of the highway to the warehouse back so that the aging truck driver population has a safe job for the next 20, 30 years, just like they did with the taxi industry. And this is when this technology will hit the roads. It will hit before passenger cars because transporting goods, especially on the highway on a separate lane, policymakers have fewer concerns than transporting a passenger, but this is why I think in the next seven to 10 years we could see that evolution and that means a lot of change for the industry. It's really interesting. I actually had not heard that idea of kind of the last mile human trucker, but it makes a lot of sense, and I do feel like for years people have been saying that trucking is kind of the first part of mobility that will be autonomous. The technology is already there. If you look at ports, if you look at mines, there are already autonomous trucks driving in safer environments. If there are no people around, they can already drive perfectly. And so it's more about policymakers accepting certain risks. And when the pain is big enough, I think they will be willing to take a bit more risk, and then we're going to see the adoption again on the highway first. So seven to 10 years and we just have to stick it out with the driver's footage. And then we're going to look at the electric trucks. Electric trucks are hitting the roads these days, so this year they started hitting the roads. The challenge with electric trucks is they cost three to four times more than diesel trucks. Why would a small company with three trucks by a fourth truck that cost more than the entire fleet without knowing residual value for how much they can sell it without knowing if anyone pays a truck and whether anyone pays a premium for having a green transport. And this is why already today truck manufacturers have to reinvent a little bit how they sell and distribute trucks. This is why conveniently just two weeks ago we launched a giant venture with Scania, which is part of the Volkswagen group to sell or distribute trucks with a pay-per-use model so that when truck drivers want to get an electric truck, they pay-per-kilometer. They have everything included, maintenance and so on. If you know car sharing just like that without the sharing part it's just one truck for one company so they minimize the risk of getting a new asset and then we guarantee utilization from the sender side. So there's two contractual relationships allowing small trucking companies to get a truck with a pay-per-use per kilometer and when they drive they also have the load that comes from a small margin. It sounds like with the partnership with Scania that the lines are kind of blurring between manufacturer and logistics provider, technology provider. Absolutely and especially in these times where maybe the venture capital market especially for growth startup is a bit colder and a bit more tricky having a big partner such as Scania and Italian Post is our second largest shareholder with whom we also have a different joint venture. It's super super valuable because these companies have a different investment horizon, a different understanding and can you support startups such as sender or scaleups in a completely different way than venture capital firms in these more tricky times. In the industry that you're in, I think you said earlier, it really comes down to executing well. You just have a lot of moving parts so how do you instill that kind of culture? I shared that with you earlier what we do is not always rocket science it's how we do it, how we execute it that's also compared to many startups that were in the same space when we started, only a few made it and it's because how we executed on it and how did we ensure that, I think it's all about the right people and making sure the right culture is kept as you add more and more senior people and I think we did a few cool things to ensure that, of course in selecting the right talent is one thing but also promoting our talent in the culture, we do things such as to send a summer camp, are we proud of that where we bring together once a year the entire company for a couple of days to really align our strategy, make sure we all understand where we're going, why we're doing certain trade-offs which is extremely difficult, it's super, super valuable also to then force the culture that we're keeping alive and developing I think as we're speaking COP28 is either kicking off or it's already underway but you were talking about the electric transition, there's a little bit it takes a bit to convince people to move over how much do climate either concerns or governments are now issuing regulation on this kinds of things, are these impacting the business yet or not? We need the support of policy makers in one interesting statistics that I haven't mentioned already is that the most transported good on trucks is air so there's a lot of emissions that can be saved in multiple ways producing empty kilometers is definitely one but also moving towards advanced fuels greener fuels and electric vehicles is the way to go and this is where policy makers need to invest and the big challenge now we have with electric trucks is that they're no charging infrastructure we're now sending out people from Sender to really screen and take pictures of charging stations that have as the right voltage to see whether the truck can park there and charge and this shows how we're struggling to build electrification and trucking and how much policy makers can and need to support Maybe as a question to wrap up if air is the number one most transported thing on your platform what is the second most popular thing to transport on Sender? It's probably not as interesting but it's pallets with mostly parcels we do a lot of e-commerce so if in Europe you order something for Christmas most likely Sender might have transported some of those parcels Got it, you can thank Sender during holiday season well thank you David and thank you everyone for a great conversation Thank you so much