Pakistani startup Trukkr revealed it had secured $6.4 million in a seed round to expand as a fintech firm, releasing financing solutions for truckers.
Accion Venture Lab, a VC company focusing on fintech; Sturgeon Capital, a UK-based VC firm; Peter Findley, an angel investor; Haitou Global, a US-based VC firm; and Al Zayani Venture Capital, a VC firm focused on Bahrain.
Trukkr co-founder and CEO Mishal Adamjee stated that “we have built a powerful engine of growth and inclusion, with a unique origination and an underwriting model built for developing markets,” which has allowed the company to grow “smartly, safely, and scalable” despite the global economy’s volatility.
According to Crunchbase, it was previously reported that the firm will be receiving $600,000 in early investment in 2021. The company also received loans in 2021 and a pre-seed round in 2019.
Trukkr was established in 2019 as a marketplace to link truck drivers with businesses in need of their services. It was created by Sheryar Bawany, Mishal Adamjee, Haji Ali, Waqas Khatri, and Kasra Zunnaiyer. Now, though, the company has modified its strategy to one more typical of fintech startups.
“It is really early in Pakistan for a marketplace concept,” explains Sheryar Bawany, co-founder and CEO of Trukkr. According to our findings, “the lack of funds among carriers was the primary barrier to linking shippers and transporters.”
The business claims that just 5% of trucking firms utilising the Trukkr platform have access to banking services and that many of them must wait up to 90 days to get paid for their services. This prevents businesses from paying for essentials like gas, tolls, and regular vehicle maintenance.
On the other hand, small truckers that work with large fleets to haul freight are only compensated partially by the larger firms, which impedes their ability to compete.
Trukkr’s innovative fintech model provides a way to address a cash flow issue while also addressing a major limitation of the marketplace approach. Trukkr claims to address this funding shortfall by using logistics data to approve loans to trucking firms, so allowing these enterprises to expand their operations and generate more income.
The company has been granted permission to operate as an NBFI by the Securities and Exchange Commission of Pakistan. However, the startup’s financial emphasis does not imply that it will abandon the marketplace model altogether.
According to Robin Butler, partner and head of impact at Sturgeon Capital, “data and distribution” are two of the biggest obstacles facing new fintech lending enterprises in developing countries. As a result, “this data difficulty is worsened in the opaque, offline trucking sector in Pakistan,” whereby players have been chronically ignored by conventional banks.
Trukkr claims that over 20,000 transportation businesses have joined its network in the previous year. Sheryar went on to say that they are more long-term viable since they have avoided aggressive growth through price cuts.
The business will be working with banks to lend a portion of the funds raised in the most recent round. The company also hopes to increase the size of its Series A funding round this year and roll out new features for existing customers.
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