The initial seed funding of $600,000 in Loop Freight marks Anchorless Bangladesh’s foray into the country’s truck freight industry, which it said is worth over $10 billion a year.
Founded in Dhaka in 2018, Loop Freight operates a platform that it said to digitise the process for both shippers and carriers end-to-end, while cutting freight costs.
Fahim Salam, the startup’s co-founder, told local press that the platform was able to reduce the asset management cost of a feed mill client by 27 per cent using reverse logistics. Loop Freight seeks to improve processes in manufacturing and distribution heavy countries in Asia, starting with Bangladesh.
In an introductory post on Medium, Anchorless Bangladesh founding partner and CEO Rahat Ahmed said the VC firm’s goal is to identify early-stage startups the are ready to take advantage of the large, unique opportunities in Bangladesh. Ahmed is a former investment analyst with Prince Street Capital Management, a US-based hedge fund focused on emerging markets.
“Loop is a company on that exact mission, re-imagining the movement of commercial goods for next-generation shippers and carriers,” he said.
Ahmed said Loop sees the problem of a massive freight market operating without a centralised booking system, lacking transparency and tracking, and without quality data to analyse and improve the ecosystem. The country currently has a fleet of more than 200,000 trucks nationwide.
Loop targets truck fleet owners as carriers rather than independent drivers. Through the platform, shippers are able to book, track, and pay for shipments while carriers are given the option to choose loads closes to them.
While its debut investment is in Bangladesh, Ahmed said Anchorless sees the potential to expand beyond the country, which is positioned strategically as a gateway between India and China, two of the world’s largest economies. He added that Loop has the ability to naturally engage in cross-border operations.
“At the end of the day, our belief at Anchorless is not only in Bangladesh, the country and its potential, but also in Bangladeshis – the people and their abilities – about how access to expertise and capital can empower them to build companies that solve global problems,” he stressed.
In an interview with DealStreetAsia in January, Ahmed said that Anchorless is aiming to raise $30-40 million for its debut fund. He declined to share how much has been raised so far, but its limited partners (LPs) include Jim O’Shaughnessy and other US high net worth individuals (HNWIs), family offices, and endowment funds.
Venture capital investing in Bangladesh is still in its infancy. Shawkat Hossain, general secretary of Venture Capital Association of Bangladesh, said in an article at The Financial Express that only around $15 million were invested in several startups in the country in 2019, lower than the $27 million in 2018.