The International Finance Corporation (IFC), private sector investment wing of the World Bank Group, is looking to invest $3 million in Truck Lagbe, the Dhaka-based logistics technology startup, as part of its Series A round, reports TBS.
A IFC disclosure says: “The proposed equity financing is for Truck Lagbe Inc. (“TL” or the “Company”), Bangladesh’s leading digital trucking platform. TL’s platform aggregates and matches demand for freight (from individuals, SMEs and large enterprises) with the supply of trucks (from truck owners/drivers called partners). By leveraging technology, TL offers price transparency, real-time tracking and optimum asset utilization and efficiency across the value chain.”
Truck Lagbe “is in the process of raising Series A financing of US$5 million. IFC is proposing an equity investment into TL of up to US$3 million. The funding will support the expansion of the Company in the domestic market along with the introduction of ancillary services for partners,” the disclosure further adds. IFC disclosure shows that the deal is pending approval. Truck Lagbe CEO Anayet Rashid told TBS that no deal has yet been finalized.
Understanding Truck Lage
Truck Lagbe is a fascinating company for a number of reasons. Truck transportation is a difficult industry. It remains largely archaic and is littered with problems like middleman and syndicate that have been a major challenge for the efficiency of the industry. Customers, both individuals, and businesses, routinely suffer because hiring trucks is seldom a good experience and truck owners and drivers suffer from lack of trips and suboptimal business returns. The industry operates in a certain manner and has been highly resistant to change.
Due to the nature of the industry, Truck Lagbe had to struggle and work doubly hard to find a footing in the industry in the early days. The Truck Lagbe team, however, has remained persistent and doggedly pursued the industry. Through a combination of hard work, innovation, and ingenuity, the company has managed to break into the industry.
Today, Truck Lagbe is one of the largest players in the logistics space in Dhaka and the company keeps on growing.
Broadly speaking, Truck Lagbe works with two stakeholders. One, truck owners and drivers. Two, shippers – consumers and businesses who hire trucks through truck Lagbe. While the needs of these two segments are distinct, they play an interdependent role for Truck Lagbe. Because the success of one influences the success of the other.
To put it simply, for Truck Lagbe to be able to attract truck owners it needs to have enough users on its platform. Similarly, in order to have users – individuals and businesses – Truck Lagbe has to be able to fulfill any orders it generates on its platform. Truck Lagbe is essentially a marketplace. While it eventually gets easier to attract both shippers and truck owners, in the early days it is an uphill battle to attract either for any platform. Platforms usually initiate a self-perpetuating cycle once it reaches a critical mass of users threshold.
This reality applies equally to Truck Lagbe. For example, Truck Lagbe initially started off slow. The company had difficulty entering both the supplier market, which is owners and drivers, as well as the shipper market, which is individual and businesses who hire trucks. However, once the company reaches a certain threshold, it has become easier.
In building a platform, when you have enough consumers hiring trucks using the Truck Lagbe platform, it automatically helps you in attracting more truck owners and drivers who are always looking for more businesses and thus more consumers who have better fulfillment rates and better prices and services and the cycle reinforces itself.
One thing that has helped Truck Lagbe is a great product for which the time has come. Hiring trucks, in the traditional market, is an uphill battle for most shippers – be it individual or business. It is an experience that most consumers would love to do away with. This is exactly what Truck Lagbe enables consumers to achieve.
Using the Truck Lagbe app, you can hire a truck in just a few clicks. The company has launched a user-friendly app that makes the entire process of hiring trucks simple and hassle-free for consumers.
On top of that, over the past years, Truck Lagbe has been able to build a good amount of awareness in the market and thus establishing trust and a perception among consumers that Truck Lagbe makes hiring trucks simpler. As a result, there are a large base of consumers who now hire trucks through Truck Lagbe, enabling Truck Lagbe to offer a solid value proposition to truck owners that if you come on to Truck Lagbe platform – you have chances of having good business compared to what you used to get.
The cycle continues and helps grow each part of the business. The model, being a marketplace and an aggregator, helps Truck Lagbe to attract both consumers as well as truck drivers and owners at an increasing rate.
Truck Lagbe directly connects truck owners with people who need to hire trucks. This is a direct connection, which means you are peeling off a long list of middle-men and syndicates that used to operate in between truck owners/drivers and shippers. At the same time, by ensuring information symmetry Truck Lagbe has improved the overall trip efficiency of the industry. Today, a truck owner does not need to worry about finding a return trip.
Truck Lagbe has made the entire process efficient for both the truck owners and the customers. Both parties now could save money – owners could earn more and users could hire trucks at a better price. (read the full piece here.)
Truck Lagbe and aggregation on the internet
In November 2020, Truck Lagbe launched a new version of its app with multiple improvements and new features allowing users to rent a truck from anywhere in Bangladesh with a few clicks on their handheld devices. The new app works more like the ride-hailing apps, where users will be able to send requests for trips, which will then be sent to the nearest available drivers, and then a truck will be matched as per user’s demand.
This is the ultimate uberization of the trucking industry, a big leap for Truck Lagbe in the sense that in order to launch the new version of the app, that makes trucking truly on-demand, the company has to make a number of things happen including standardization of pricing. Truck Lagbe users now can hire small pickups at a fixed rate inside Dhaka city within a short time. Other trucks for all over Bangladesh are hired through a bidding process among drivers.
Customers using Truck Lagbe app for hiring trucks is important for Truck Lagbe for several reasons. More customers hiring trucks through app means, more drivers will have to use the app to get trips and bid for trips. This latter outcome, more driving using the app, is the target where Truck Lagbe aims to reach. Bringing in more customers to the app allows Truck Lagbe to bring more truck drivers and owners to the app, which enables Truck Lagbe to take advantage of various aspects of being an aggregator such as selling services to truck owners and drivers.
From Truck Lagbe Opens Up Its Platform, Aggregator, And The Business Of Truck Lagbe:
“For Truck Lagbe, truck owners, drivers, truck-related utility sellers, shippers, and everyone else in the universe of truck-transportation are its potential customers. The core stake of getting there is owning the interaction with truck owners and drivers and shippers. Once this nod is done, the rest is bound to follow. And the real business of Truck Lagbe begins when they are done with this phase of their development.
Let’s go a little deeper. Apparently, what we see is that Truck Lagbe is a two-sided marketplace: truck owners and shippers. But if you pay closer attention it is not that simple. The list of stakeholders is long. For clarity, there are owners, drivers of trucks, and then there are shippers, and then over time, service providers, utility, and products sellers would also take interest in the platform and so on. The beauty of a platform is that you are essentially building infrastructure at the beginning and then once the infrastructure is ready, you can decide how you want to take the benefits of it to the point it does not break. For Truck Lagbe, it is a two-sided marketplace but over time, the company expects that it will be able to activate different parties in this two-sided transaction, starting from services to products to more, which is now only truck owners and shippers.”
Unless truck drivers and owners use the Truck Lagbe app regularly, activating these other areas of business at scale will be difficult. To that end, while this overhaul of its app about bringing in more customers to Truck Lagbe app, it is also about making drivers and owners use Truck Lagbe app more often. Such is the nature of the world, the most important thing often goes unnoticed. Read the full piece here.
The new investment will certainly help accelerate Truck Lagbe’s expansion in this direction. As IFC disclosure puts it: “The funding will support the expansion of the Company in the domestic market along with the introduction of ancillary services for partners.”
Go deeper: The Future Startup Dossier: Truck Lagbe
2. Jeff Bezos Steps Down as Amazon CEO, Ben Thompson Bezos Column
This is already old news: Jeff Bezos is stepping down as chief executive of Amazon. Bezos founded Amazon 27 years ago and built the company from an obscure internet retailer to one of the most dominant technology companies in the world.
A company announcement said, Bezos will transition to the role of executive chair in the third quarter of this year, which starts July 1. Andy Jassy, the chief executive of Amazon Web Services, will take over as CEO of Amazon.
Bezos, in a memo to employees, said the transition will give him "the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions." This is already a much discussed news. Ben Thompson of Stratechery published an excellent blog post on Bezos aptly titled The Relentless Jeff Bezos. From Ben:
“What is clear, though, is that any attempt to understand the relentlessness of the company redirects to their founder, Jeff Bezos, who announced plans to step down as CEO after leading the company for twenty-seven years. He is arguably the greatest CEO in tech history, in large part because he created three massive businesses, all of which generate enormous consumer surplus and enjoy impregnable moats: Amazon.com, AWS, and the Amazon platform (this is a grab-all term for the Amazon Marketplace and Fulfillment offerings; it is lumped in with Amazon.com in the company’s reporting). These three businesses are the result of Bezos’ rare combination of strategic thinking, boldness, and drive, and the real-world manifestations of Amazon’s three most important tactics: leverage the Internet, win with scale, and being your first best — but not only — customer.”
I highly recommend you read Ben’s piece here.