Travis Kalanick may be busy cooking up a cloud kitchen business, but that hasn’t stopped the former Uber CEO’s VC fund from making its first investment in Southeast Asia. 10100, the firm that Kalanick launched last year for investments in Asia, just took part in a $7.6 million seed round for Kargo, an early-stage “Uber for trucks” startup based in Indonesia and — you guessed it — was founded by a former Uber Asia executive.
Kargo takes some of the concepts behind Uber and applies them to trucking and logistics. That’s to say that business customers order trucks using a mobile app or website, but the scope is wider, Kargo CEO and co-founder Tiger Fang told TechCrunch. Unlike Uber, Kargo works with truck operators and 3PLs rather than truck drivers themselves.
The goal is to remove excessive middlemen who broker logistics and trucking deals and thereby provide greater transparency, better quality service and improved financials for clients and those operating the services — so cheaper pricing for companies and a larger share of the revenue for those actually out driving. So rather than being subject to closed discussions and chains of brokers, each taking their cut, Kargo wants to offer a more direct connection between logistics operators and clients.
“This is a huge opportunity,” Fang said in an interview. “We’ve been looking at what types of problems we can go and solve [since the Uber-Grab deal]… starting another e-commerce startup was probably not the best idea.
“We hope we can lower the price for shippers and raise the earnings from shippers and transporters,” he added. “We think there are hundreds of thousands of smaller companies who all get their jobs from agents and middleman.”
Fang — whose stint at Uber included time in the U.S., launches across Southeast Asia and managing its business in Chengdu, once the company’s busiest city on the planet based on daily trip volume — started Kargo late last year with Yodi Aditya, its CTO, following “months” of research after Uber sold its local business to Grab. They went on to close the financing deal before the end of 2018 and launch in beta early this year.
Operationally, Fang said Kargo is currently piloting with “a couple of big FMG companies” and their logistics, while, on the supply side, it has access to “thousands” of trucks. The initial focus is strictly on FMCG, he added, because each industry and segment requires different types of trucks.
As those figures suggest, Kargo is in its early stages, and that makes a $7.6 million seed round pretty notable. Yes, valuations and rounds have been ratcheted up in Southeast Asia, where investors and tech companies see potential as internet access grows among the region’s 600 million-plus consumers, but this is a large check for a venture that is literally just kicking off. But that’s not all; the caliber of the backers is also quite unlike your average seed deal.
Kalanick’s 10100 firm is participating, but the round is led by Sequoia India and Southeast Asia, which announced its new $695 million fund six months ago and has since added an early-stage accelerator program. Other names involved include China’s Zhenfund, Indonesia-focused Intudo Ventures, a personal investment from Patrick Walujo — co-founder of Indonesian hedge fund group North Star — ATM Capital, Innoven Capital and Agaeti Ventures from Indonesian businessman Pandu Sjahrir.
Kalanick is, in many ways, the headline investor, given his profile and connections to Fang and others at Kargo. TechCrunch understands that Kalanick agreed to invest last year when he visited Southeast Asia on a trip that combined hiring for his CloudKitchens startup and more generally catching up with the Uber alumni in Asia.
Fang declined to comment on the circumstances, but he said Kalanick “has been a big mentor” to him.
Clearly, a lot of the interest in Kargo stems from the team’s credentials — Fang said a large chunk of Kargo’s 50-person team are ex-Uber Asia — but there are also promising examples of what Kargo is doing in other parts of the world.
China’s two trucking platform unicorns merged to create Full Truck Alliance Group, a startup reportedly valued at $10 billion that counts Google and SoftBank among its investors, while in India, Blackbuck is reportedly raising at an $800 million valuation. It’s logical, then, that Indonesia — the world’s fourth largest population and Southeast Asia’s largest economy — would also come under the radar, and Fang believes that his team is ideally suited to go after the problem.
The focus is entirely on Indonesia for now, where Fang believes logistics accounts for close to one-quarter of the national $1 trillion GDP, but further down the line he anticipates there will be expansions across Southeast Asia and potentially beyond.
“We definitely want to build a global company,” he said.
Uber had a tough run in Indonesia. Taxi drivers and those with interests in the industry staged often-violent demonstrations in protest at this “foreign” entrant that posed a threat to their businesses and financial returns. Trucking feels a lot like that with decades of inefficiencies in place, and certain parties profiting from those extended chains of deal-making. Like taxis, those who are being disintermediated aren’t likely to take a threat lying down, so it remains to be seen if Fang, and his fellow ex-Uberites, will run into similar conflict in the future. But Kargo is certainly off to a bright start with plenty of money to go out and test its thesis.
https://ift.tt/eA8V8J Indonesia’s Kargo comes out of stealth with $7.6M from Travis Kalanick, Sequoia and others https://ift.tt/2CrXWuP
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