JB Hunt, a transportation and freight network giant, is looking for software and digital products that will help it accelerate its business, adapt to the modern world, and even dominate its industry. And it's using startup incubator UP.Labs to help build it.
On Wednesday, at the UP.Summit event in Bentonville, Arkansas, the 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 will be launched in 2025 and will focus on some of the biggest problems in logistics and freight.
UP.Labs is not structured like many startup incubators that exist today. The company operates alongside venture firm UP.Partners, and although it uses some fundamental concepts found in the venture capital world, it is not a traditional VC firm.
Instead, UP.Labs is a venture lab with financial investment vehicles. The company contracts with leading companies to solve problems for the company and the broader sector. These are not intended as proof-of-concept ideas. Instead, these startups are designed to operate independently and commercially.
Importantly, UP.Labs does not allow corporate partners to invest more than their pro rata share in any funding round, as it can be difficult to attract talent and future investors. That means no. After three years, the corporate partners have the option to acquire the remaining shares in the startup. We plan to use a third-party valuation company to determine fair market value.
John Kuolt, founder and CEO of UP.Labs, told TechCrunch in a recent interview that the opportunity to develop logistics startups focused on software and data is huge. .
This will be the third Venture Lab since UP.Labs and a major company launched it in 2022. The first partner was Porsche, a leading company in the automotive field. Several startups have launched under this partnership, including Pull Systems, which has developed performance management software for EV suppliers, manufacturers and operators. The institute also founded Sensigo, a startup working to develop software that allows service technicians to diagnose problems in modern software-defined vehicles in minutes instead of days.
Last year, UP.Labs established an aviation-focused lab with Alaska Airlines. The first startup from that lab, Odysee, was made publicly available at UP.Summit.
Quorto said UP.Labs has launched 10 companies in the past two and a half years, including four with Porsche and two with Alaska Airlines.
“Startups are nothing new for us,” Sherri Simpson, president and CEO of JB Hunt, said at the UP. He pointed out that it has transformed into a company. The transformation required internal innovation and leveraging external partners. For example, Walmart, Tyson Foods, and JB Hunt partnered with accelerator network Plug and Play in 2019 to launch a logistics-focused program in Northwest Arkansas.
Speaking on the sidelines of the UP.Summit event, she said what's different this time is the way the Venture Lab is run.
“We don't think we can solve everything on our own,” Simpson said. “We recognize that the market is very large and we certainly think there are good and smart people out there, but we also know that there are really smart people out there and we are always looking to find good partners. It's important for us to be able to do that.”