Truck It In Secures Record Seed Round To Drive Its Expansion

Digital transformation has the potential to transform every industry – and to drive outsized returns for those who can help execute it. Just ask Pakistani start-up Truck It In, which will today announce the successful completion of a $13m seed funding round – the largest ever seed round recorded in Pakistan.

Truck It In is the brainchild of a group of founders who first worked together at Careem, the vehicle for hire start-up acquired by Uber for $3.1bn in 2019. “We felt we had complementary skills and we were determined to create something that would have real impact in Pakistan,” says Muhammad Sarmad Farooq, CEO of Truck It In. The company only launched last March but it already employs more than 200 staff, with revenues up 37 times’ since those early days. “The response from our market has been huge and overwhelming,” he says.

Truck It In is essentially a matchmaking platform for shippers who need goods delivering in Pakistan and truck drivers able to meet that need. It already serves more than 100 “trade lanes” – routes between towns and cities across the country – and continues to expand.

The platform is a digital solution to an analogue problem. Pakistan’s trucking industry is large but highly fragmented: as many as 95% of operators in the sectors are small businesses with fewer than five vehicles – and very often just a single truck. When shippers – including both large organisations and millions of small and medium-sized enterprises – have goods that need moving, navigating this fragmentation is challenging and time-consuming. Both sides have therefore traditionally depended on an army of intermediaries – middlemen who work with groups of truckers, or with groups of shippers, or manage practical issues such as documentation.

The result of this dependence on middlemen suits neither shipper nor trucker. Truck It In estimates that the Pakistani road freight industry is worth around $25bn a year, the equivalent of 10% of the country’s GDP. But shippers are routinely overpaying, because the costs of all those intermediaries are so high; truckers, for their part, are very often poorly paid. “A trucker who spends every day moving goods worth $50,000 might be paid only $100 a month,” says Farooq.

The allure of Truck It In, then, is the potential to cut out these middlemen. This process of disintermediation offers the same economic benefits as in every other industry where it has been applied, with a dividend for both sides. Shippers should pay less to move their products from A to B. Truck drivers should be able to increase their income.

That applies even after Truck It In takes its cut. The platform earns a crust by charging a commission each time it facilitates a shipment, with the exact amount depending on factors such as the trade lane served and the price negotiated between trucker and shipper.

It is not even as if middlemen are providing a good service, Farooq points out. Most deal with only a handful of truckers or shippers – so both parties need to talk to multiple intermediaries to make progress. It is a slow and inefficient way to do business.

“The aim is to take out the pain points in an industry where people rely on mental noes and telephone calls,” Farooq says. “We are bringing efficiencies here by building a platform to ensure that SMEs have the right tools and services to thrive today; we are looking to transform the experiences of shippers and truckers, heralding them into the digital future.”

The company sees plenty of scope to do more of that. Beyond the basic matchmaking service, the platform is adding new tools for both parties; indeed, the company’s new funding will help it make further investments in its software engineering team. There is potential, for example, to digitise the complicated documentation that needs to accompany most shipments. And as the platform’s data increases, it can help truckers to build a better understanding of the market, and therefore to focus on the most profitable areas of business. “We’ll help them make smarter decisions,” Farooq promises.

It is a pitch that has resonated with investors, with the company having raised $4.5m even before today’s seed round announcement. The new capital raise is led by two venture capital firms, Global Founders Capital and Fatima Gobi Ventures. “The pandemic has accelerated digital adoption among larger players, widening the gaps of the haves and have-nots in the logistics world,” Ali Mukhtar, general partner of the latter firm. “We believe Truck It In is key to closing this gap by making it easy for SME truckers to streamline operations and compete on a more level playing field while keeping costs competitive and serving as a vital lifeline for Pakistan’s thriving economy.”