Biden administration on Sunday bails out failed Silicon Valley Bank (SVB) to guarantee customers will have access to all their money starting Monday.
The banking crisis was close to a contagion run where many companies and individuals would pull their money out of small banks in fear that the SVB meltdown would spiral across the banking sector.
The failed bank focused provided a lot of venture capital for start-up companies, including two big names in the trucking industry: Trucker Path and Netradyne.[Related: Be Proactive in your fleet’s safety management with our PSM Motor Carrier Program]
The fear was these companies would not have access to the money tied up in SVB to continue their growth plans, pay employees, and more.
While the government found a way to bail out the bank without using taxpayer money, the long-term fear still exists for the coming years.
Trucker Path’s ties to Silicon Valley Bank
Trucker Path is one of the most used mobile apps for North American truckers, providing navigational assistance, truckload sourcing, and access to vital up-to-date information about truck stops, real-time available parking, fuel prices, weigh station status, and truck scales and wash locations.
Trucker Path released a crowdsourcing navigational app for truckers in 2013, followed in 2016 by Truckloads, an online marketplace specializing in connecting freight companies and carriers, and in 2023 opened its new in-app “Marketplace” featuring discounts and special offers on products and services specifically for drivers.
The list of Marketplace services and discounts includes:
- Telehealth Services
- Discount Prescription Cards
- Major Medical Insurance
- Dental & Vision Coverage
- Life Insurance
- Accidents Medical Coverage
- Accounting Services
- Tax Preparation
Much of the company’s growth was due to their most recent funding round in 2017, raising $30 million in 2017 with Silicon Valley Bank for debt financing so it can start loaning some of those truckers’ money right after they deliver their freight.
It means truckers needn’t wait 30 to 60 days to get paid by the vendors who hire them. In the meantime, the loans are a new revenue opportunity for Trucker Path, which is charging its customers slightly more in interest than it’s paying its debt provider.
Netradyne’s ties to Silicon Valley Bank
In September 2022, Netradyne secured $65 million in debt financing from Silicon Valley Bank to “fast-track growth” to develop product suite and global corporate expansion.
The company applies new A.I. technologies to the commercial vehicle industry and building the future of vehicle telematics with fleet camera and GPS tracking systems to improve driver performance, collision management, and fleet tracking.
“After five years in business, we have set some unprecedented market-leading best practices, and this round of funding from SVB will help propel us forward,” said Avneesh Agrawal, co-founder, and CEO of Netradyne.
Netradyne currently operates in the US, India, Canada, UK, Australia, and New Zealand. With the recent debt financing, Netradyne will expand its international growth to Mexico, and four European countries including France, Germany, Italy, and Spain by early 2023.
“Netradyne’s fleet safety and tracking solutions are great examples of the innovative solutions and technologies being developed right here in San Diego. Our goal is to empower Netradyne, and the broader San Diego tech ecosystem, with the right financing, services, and connection to move their businesses forward,” said Eric Otterson, Managing Director for Silicon Valley Bank in San Diego.
What does the government “bailout” mean for these company’s future?
President Biden just told America that Americans can have confidence in our banking system and that it is safe.
The actions Biden emphasized include backstopping depositors’ funds, taxpayers not being on the hook for these moves, holding those responsible accountable and not extending relief to investors of Silicon Valley Bank.
However, investors into these banks will not be protected from their losses.
So, for now, the money is available to Netradyne and Trucker Path, but the ultimate concern is how tied up their money is.
As a carrier, how do you manage cashflow?
Like with banks, running a trucking company requires a lot of attention to detail. If anything falls through the cracks, your company could face costly issues.
As a new trucking start-up, the biggest reason owner-operators fail is not having enough money saved up before going on their own to manage start-up costs, maintenance emergencies, or lagging payments after finishing a load.
Managing cashflow is crucial for success and the way you control positive cashflow is to speed up the inflow and reduce the cash outflow.
Read more about managing cashflow:
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