Trucking Company Schneider Invests in Chemicals Supply Marketplace

The terms of the investment, which would give Schneider a 12% to 13% stake in the business, weren’t disclosed. ChemDirect founder and Chief Executive Tyler Ellison, a former senior executive at Schneider, said the company expects to raise between $7 million and $12 million in the funding round at a valuation between $30 million and $50 million.

Schneider’s stake would amount to between $3.6 million and $6.5 million on those financial terms.

The agreement brings Schneider a potential strategic expansion of its capabilities in the specialized market for bulk deliveries to industrial customers. Schneider said its bulk division, which is 4% of its total business, hauls mostly chemicals.

“We believe that there is an opportunity to create a fulfillment capability, soup to nuts, that provides a frictionless experience for the distributor on one end, the consumer on the other end,” said Shaleen Devgun, Schneider’s executive vice president, chief innovation and technology officer.

Mr. Devgun said Schneider would provide trucks for shipments booked through ChemDirect and would manage the logistics with other companies, including using rail-truck intermodal operations.

Dean Croke, a principal analyst at online freight marketplace DAT Solutions LLC, said he is seeing these deals more frequently.

“It’s about controlling more aspects of the supply chain to ensure your customers get their freight where it needs to be, when it needs to be there,” Mr. Croke said.

The move brings Schneider, which operates a fleet of roughly 9,000 tractors, deeper into the U.S. chemicals industry, which generates $486 billion annually, according to the American Chemistry Council.

Mr. Ellison founded ChemDirect in 2019 with a goal of creating an online marketplace for chemical buyers and sellers similar to e-commerce retail sites, making it part of a field of businesses seeking to create business-to-business e-commerce capabilities in industrial markets that often work through established middlemen and suppliers.

Mr. Ellison was an executive at Schneider for 12 years, and was later chief executive of chemicals manufacturer Nova Molecular Technologies Inc.

ChemDirect says its orders take about 3½ days to be delivered, compared with what it says is an industry average of 12 weeks. The company also gives chemical suppliers access to data about their buyers, Mr. Ellison said.

The company “really is lifting that dark veil of the supply chain and allowing manufacturers the visibility to say, ‘Who’s buying, why are they buying, what else are they buying?’” Mr. Ellison said.

Write to Liz Young at [email protected]