Bain, Section Partners see massive opportunity for investment in young logistics companies

This fireside chat recap is from Day 2 of FreightWaves’ Future of Freight Festival live event taking place in Chattanooga, Tennessee. For more information on the event, click here.

FIRESIDE CHAT TOPIC: The opportunities and trends in valuations and funding early stage investors see in supply chain markets.

DETAILS: According to Ajay Agarwal of Bain Capital, opportunities to invest in logistics and freight startups have never been greater for early stage investors. And according to Amrith Ravi and Reiss Jensen of Section Partners, there’s a pretty huge opportunity for companies looking to earn some cash, too. FreightWaves’ Rachel Premack sat down with the three executives to talk about why now is the time to invest in logistics and freight businesses and how they can obtain funding without the risk of losing everything if it all goes south.

SPEAKERS: Ajay Agarwal, partner, Bain Capital Ventures; Amrith Ravi, partner, Section Partners; and Reiss Jensen, investor, Section Partners.

BIO: Agarwal is a Partner with Bain Capital Ventures (BCV), where he has been one of the industry’s most active early stage investors in the logistics and supply chain space. BCV has invested in an array of seed and early stage companies focusing on driver safety, freight payments, modern procurement and factoring.  Prior to BCV, Agarwal ran product and global trade management for Trilogy Software, where he scaled revenues from $1 million to $300 million over eight years. He has been named to the Forbes Midas List of top 100 tech investors in the world.

Ravi is a Partner at Section Partners, where he invests in numerous growth-stage companies and provides solutions for personal, structured financing to founders, executives and key shareholders of various venture-backed technology companies. Ravi has led or been involved in over 75 transactions while at Section Partners. His experience includes investments in and transactions with FreightWaves, project44, EasyPost, TechStyle and Benchling, among others. Prior to Section Partners, he was a buy-side investment professional in the hedge fund and private equity sectors for over 20 years.

Jensen is an Investor at Section Partners, where he supports investment activity in numerous growth-stage companies and provides solutions for personal, structured financing to founders, executives and key shareholders of various venture-backed technology companies. Prior to Section Partners, Jensen was an Investor focused on the life-sciences sector at LDD Partners. He also spent time in product and as a financial analyst at System1 (NYSE:SST) and Kodiak Cakes (acquired by L. Catterton).

KEY QUOTES FROM AGARWAL, RAVI AND JENSEN:

“Even in a recession, when you think about a tiny startup, the market share any startup has relative to that market is so small that our companies are still growing like crazy — even in this environment. So you have to be more careful about burn and raising capital is harder. But the size of the opportunity has never been bigger, so we’re very bullish, even at the early stages.” — Agarwal

“What we’re doing … is even though we have this loan structure, it’s very much equity risk in the company. Because the company doesn’t have an exit, we don’t get paid back. And there’s no maturity date on the loan.” — Ravi

“A founder will come to us at Section Partners, and they’ll look for an alternative to a secondary sale. So what we’ll do is we’ll provide them with a loan, and in turn, they’ll collateralize and pledge a portion of their common stock in their private company to us via contract. And ultimately, they’re not responsible for paying us back unless there’s any sort of liquidity event. So if the company never goes public, you know that you don’t owe us back. If the company goes to zero, you don’t owe us back.” — Jensen

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