Kargo loads up US$31M Series A round and launches Logistics Relief Fund to support truckers on its platform
Indonesia-based freight logistics marketplace Kargo Technologies (Kargo) announced earlier today that it has secured US$31 million Series A funding round led by Silicon Valley-based Tenaya Capital. Other participating investors include Sequoia India and Southeast Asia, Intudo Ventures, Coca-Cola Amatil, Agaeti Convergence Ventures, Alter Global, and Mirae Asset Venture Investment. As part of the round, Kargo was also to secure debt financing from some of the largest regional banks and financial institutions.
The funding round closes as Kargo joins the battle to curb the growing Covid-19 outbreak in the world’s largest archipelago. The startup is seeding a Logistics Relief Fund by asking all employees to contribute a portion of their salaries to aid transporters and ensure no disruptions to essential supplies in Indonesia.
Kargo is also cooperating with numerous charitable organizations, such as Kita Bisa and PT Akar Indah Pratama, as their official logistics partner on delivery of meals and essential medical supplies to healthcare workers and patients at multiple Jakarta hospitals (RSPAD Gatot Subroto and RSPI Sulianti Saroso). Kargo welcomes all organizations in need of a logistics partner to get in touch during this crisis via: https://kargo.tech/en/covid-response/
The firm is taking extra precautions to keep drivers safe. This includes ensuring that all pit stops on its routes are well-stocked and properly disinfected. Kargo has also implemented an electronic proof of delivery mechanism on its platform to limit physical contact between users. The feature reduces the need to exchange paperwork in-person and thus may help curb the risk of Covid-19 infection.
“Kargo’s tech provides unique value in a time when logistics efficiency is paramount in Indonesia,” said CTO Yodi Aditya. “Whether it’s keeping retail shelves stocked with minimal human contact or making e-commerce orders more fluid across the nation, our team believes we can help solve this problem.”
“We have mobilized to answer this call to arms and do whatever is in our power to fight Covid-19 here in Indonesia,” explained CEO Tiger Fang. “We’re grateful for our wonderful investors who continue to support us, even in a time of financial uncertainty. Kargo pledges to be the most reliable logistics partner to ensure no disruptions to the supply chain of essential items in Indonesia Our entire company is donating a portion of our salaries to this cause and we invite local businesses and organizations to get in touch so we can work this problem together.”
The funding comes roughly one year after Kargo’s US$7.6 million seed round was led by Sequoia India and Southeast Asia. It was one of the largest recorded seed-stage deals in the region at the time and featured several other prominent global tech investors. Seed backers included Uber co-founder Travis Kalanick’s 10100 Fund, China’s Zhenfund, Indonesia-focused Intudo Ventures, ATM Capital, Innoven Capital, and Agaeti Ventures, a firm led by Indonesian businessman Pandu Sjahrir. Patrick Walujo, a co-founder of the Indonesian hedge fund group Northstar, and Cardig International CEO Diono Nurjadin also made personal investments.
While it may sound like an industry trope, Kargo can aptly be described as Indonesia’s ‘Uber for logistics,’ as the team aims to shift all logistics transactions in the country from offline to online, thereby addressing enormous inefficiencies faced by local shippers and transporters today.
The startup was co-founded by two entrepreneurs with expertise from both the logistics and technology worlds. Between 2013 and 2018, Fang oversaw the international expansion of Uber and served as its General Manager in Western China and then in Indonesia. He also held key positions at Rocket Internet, Lazada Group, and Bank of America Merrill Lynch.
Meanwhile, Yodi Aditya serves as Kargo’s CTO and worked previously with aircraft route optimization, enterprise software, and real-time payment technology.
Efficiency in the local logistics game is hindered by a multitude of geographic obstacles, a lack of key infrastructure in remote and rural areas, and an archaic industry norm of coping with middlemen that routinely hike up prices for end-users.
Because of these issues and more, local businesses (especially those in the budding e-commerce space) commonly cite logistics as one of the biggest pain points in their Indonesian operations. This, in turn, represents a huge market opportunity for innovative companies looking to solve problems by leveraging new technology.
Accenture Managing Director Mohammed Sirajuddeen recently said Indonesia has the potential to become a fully-integrated ‘quantum commerce’ environment if it can solidify four key structural elements: e-marketplaces, social media platforms, e-payments platforms, and logistics networks. The last element is where Indonesia has so far failed to accelerate.
With the gauntlet thrown down, Kargo comes correct with e+lite expertise from its founding team. The startup’s current core members hail from global tech juggernauts such as Uber, Amazon, Facebook, and top logistics companies like DHL and APL.
Using tech to connect Indonesian shippers with carriers, cutting out middlemen, providing transparency, and improving the quality of service for end-users are all parts of Kargo’s mission. The company has already amassed more than 6,000 active shippers and a network of more than 50,000 trucks across the nation.