Transportation and freight network giant J.B. Hunt is on the hunt for software and digital products that will fuel its business and help it adapt to the modern world — and even dominate the industry. And it’s tapping startup incubator UP.Labs to help build them.
On Wednesday at the UP Summit event in Bentonville, Arkansas, the two companies announced a logistics and freight venture lab that will launch up to six startups over the next three years. The first of these startups is slated to launch in 2025 and will focus on some of the biggest problems in logistics and freight.
UP.Labs isn’t structured like the many startup incubators that exist today. And while the company does operate in parallel with venture firm UP.Partners and uses some underlying concepts found in the venture capital world, it is not a traditional VC firm.
Instead, UP.Labs is a venture lab with a financial investment vehicle. The company forms agreements with major corporations to solve a problem for that company as well as the wider sector. These aren’t meant to be proof-of-concept ideas. Instead these startups are designed to operate independently and commercially.
Importantly, UP.Labs doesn’t allow the corporate partner to invest more than their pro rata in any of the financing rounds because it can make it difficult to attract talent and future investors. After three years, the corporate partner has the option to acquire the remaining shares of the startup. They will use a third-party valuation firm to determine the fair market value.
The opportunity to develop logistics startups focused on software and data is vast, UP.Labs founder and CEO John Kuolt told TechCrunch in a recent interview.
This is the third venture lab launched by UP.Labs and a major corporation since it launched in 2022. Its first partner was Porsche, which represents the automotive sector. Under that partnership, several startups have launched, including Pull Systems, which developed performance management software for EV suppliers, manufacturers, and operators. The lab also created Sensigo, a startup that is working on software to help service technicians to diagnose problems in modern, software-defined vehicles in a matter of minutes, instead of days.
Last year, UP.Labs formed an aviation-focused lab with Alaska Airlines. Odysee, the first startup borne out of that lab, made its public debut at the UP Summit.
Overall, UP.Labs has launched 10 companies — including four with Porsche and two with Alaska Airlines — in the past 2.5 years, according to Kuolt.
“Startups are not new for us,” J.B. Hunt President and CEO Shelley Simpson said at the UP Summit, noting the business has transformed from a legacy truck carrier to being one of the largest transportation logstics companies. That transformation required innovation within the company and tapping outside partners. For instance, Walmart, Tyson Foods, and J.B. Hunt partnered in 2019 with accelerator network Plug and Play to set up a logistics-focused program in Northwest Arkansas.
What’s different this time, she said on the sidelines of the UP Summit event, is how this venture lab operates.
“We don’t think we’re the ones who can solve everything,” Simpson said. “We recognize the market is very large and we certainly think we have good smart people, but we also know there’s really smart people out there, and anytime we can find a good partner, that’s going to be important for us.”
