Afrigather Kobo360, the Goldman Sachs-backed truck-hailing startup, is creating a subscription-based fleet administration software program referred to as HaulSight. The software program allows companies to trace their fleet of autos, plan routes, and entry bill discounting.
Developed this yr, HaulSight is a chance for Kobo360 to extend income from its present clientele—producers like Flour Mills, Dangote, and FMCGs like Unilever—all of which function in-house fleets and work with third-party logistics suppliers. In contrast to Kobo360’s truck-hailing platform, HaulSight is a pure software program resolution that doesn’t contain sourcing vehicles, managing drivers, or dealing with cargo-related liabilities throughout transit.
“The companies can vet and onboard their truck drivers themselves on the app,” an individual near the corporate instructed TechCabal.
HaulSight comes at a time when rising gas costs are shrinking margins for truck drivers in Kobo360’s community, forcing the corporate to regulate its fee construction. The corporate faces a fragile steadiness between truck drivers looking for larger fares and cargo homeowners, who should maintain prices low to take care of reasonably priced pricing all through the availability chain.
Kobo360 didn’t instantly reply to a request for feedback.
Over time, Kobo360 has lowered its fee from 20% in 2019 to eight% in 2021, highlighting the restricted negotiating energy of truck-hailing startups in comparison with their company shoppers. This contrasts with the taxi-hailing sector, the place firms like Uber, Indrive, and Bolt began with low commissions however have since raised charges to round 15%.
“The forms it takes to renegotiate new costs with [corporate] cargo homeowners to satisfy calls for of the truck homeowners can go on for weeks,” stated Alex Adenuga, CEO of Movam, a B2B logistics startup. “And it solely works out favorably if the truck aggregators have an in depth relationship with the cargo homeowners [manufacturers, suppliers, etc.]”
Fleet administration software program presents Kobo360 a brand new income stream from cargo homeowners and micro-fleet operators, bypassing the challenges inherent within the aggregator mannequin.
“The visibility supplied by fleet administration software program might help firms save important quantities of cash,” stated Adenuga, whose startup additionally presents fleet administration options. “Nonetheless, the market isn’t giant sufficient to generate the income and development anticipated by a VC-backed firm.”
A number of established fleet administration software program suppliers are competing for a small pool of enormous shoppers, together with Flour Mills, Dangote, and Tolaram.
International fleet administration software program suppliers within the area usually cost $7-$50 per automobile per 30 days, whereas native suppliers cost ₦100,000-₦150,000 per automobile, which is reasonably priced for giant firms however expensive for small companies.
Specializing in giant firms usually means lengthy gross sales cycles. “It may take a yr in case you’re fortunate. Should you haven’t run out of funding by then, it may be a difficult and irritating course of,” Alex stated. Nonetheless, Kobo360’s long-standing presence within the B2B logistics sector since 2017 provides it the benefit of established relationships that would assist speed up the gross sales course of for HaulSight.
Nonetheless, software program gross sales are even tougher to tug off with huge corporates due to switching prices. “One in style producer in Nigeria has been utilizing Nova Truck for years. Switching to a unique supplier could be a painful transition for them.”
Nonetheless, Kobo360 isn’t the one logistics startup keen to look past these challenges. SendStack, a 2-year-old logistics startup, not too long ago ditched the aggregator mannequin for its last-mile supply platform to promote fleet administration software program to fleet homeowners.
One other B2B logistics knowledgeable who declined to be named agreed that the margin in software program is a better promote to VCs. Nonetheless, he additionally thinks fleet administration merchandise can deliver mandatory visibility into the “chaotic” trade of truck logistics. “There’s a ache that environment friendly truck administration can resolve for [manufacturers and FMCG businesses] as a result of these property are very costly [and these businesses want to make the most of them.]”
With this new product, Kobo360 can extract extra worth from its present buyer base, together with the micro-fleet homeowners inside its community of over 50,000 vehicles.
“Truck logistics is a chaotic trade,” one B2B e-commerce knowledgeable who requested to not be named stated. “There’s a ache inefficient truck administration can resolve for these guys as a result of these property are very costly [and these businesses want to make the most of them].”
*Editor’s observe: An earlier model of this story acknowledged Kobo360 launched HaulSight. The product continues to be in growth.
