Indonesia-based trucking marketplace startup Kargo Technologies has secured a strategic investment from Amatil X, the venture capital arm of Coca Cola Amatil, both companies confirmed in a joint press release, issued hours after DealStreetAsia published the story.
“Kargo Technologies is our first startup investment in Indonesia and we are excited to be partnering with them to improve our overall logistics capability. Kargo is fulfilling two key land transportation routes for us and we expect this to increase over time as Kargo’s network expands,” said Coca-Cola Amatil Indonesia President Director Kadir Gunduz in the release.
The investment comes a year after Kargo raised $7.6 million in a seed funding round led by Sequoia Capital India that also saw the participation of Uber co-founder and former CEO Travis Kalanick’s 10100 Fund, among others.
While the size of the latest investment could not be ascertained, Amatil X had said in an interview last year that it invests up to $2 million in each of its potential investees.
The deal is a timely capital injection for Kargo at a time when many logistics players in Indonesia have been suffering on account of the impact of the COVID-19 outbreak. Kargo said it plans to use part of the funding to help its transporters survive the economic downturn caused by the virus.
As part of the strategic tie-up, the fresh capital from Amatil will also be used by Kargo to invest to spruce up technology to power all Coca Cola’s trucking needs. Kargo’s technology is expected to significantly cut out inefficiencies and drive productivity for Coca Cola Amatil’s logistics operation.
For Kargo, meanwhile, the partnership with Amatil will give the company access to the entire Coca Cola family in numerous countries, potentially facilitating the startup’s regional expansion ambitions.
“In Indonesia, road logistics amount to 16% of GDP with approximately $40B spent on trucking each year. The industry is highly fragmented, with seven million trucks operating across 17,000 islands. 90% of trucking companies have 100 trucks or less and 75% have 20 trucks or less. Kargo is building the digital infrastructure to bring efficiency to Indonesia’s logistics system,” said Kargo co-founder and CEO Tiger Fang.
An online freight logistics marketplace, Kargo connects commercial shippers with truckers across Indonesia. It says its platform will allow shippers, transporters and truckers to connect, transact and track shipments in real-time.
The company was co-founded by Fang, who served as the former general manager for Uber in western China before taking charge of its Indonesia operations. He was also part of the founding team at Lazada Thailand and Vietnam.
Kargo Technologies can be said to be a revamp of an older web-based e-trucking company called Kargo.id, which Fang acquired last year. Following the buyout, Fang and former Kargo.id founder Yodi Aditya teamed up to build the new venture but decided to keep the name to retain the older startup’s quarter of a million monthly website visitors.
In an October 2019 interview with DealStreetAsia, Kargo had said that it had become the largest trucking network in Indonesia in just six months of operation.
Other prominent players in the market include VC-backed local peers such as Golden Gate-backed Ritase, Genesia Ventures-backed Logisly and EV Growth-backed Waresix. All of them are looking to tap the opportunity in the archipegalo where logistics costs are as high as 24 per cent of the country’s GDP.
For Amatil, the deal adds Kargo to its two publicly announced portfolio companies so far: Melbourne-based payment platform Doshii and Singapore-based F&B digital ordering platform Tabsquare.
The venture capital firm makes investments from a fund derived from the balance sheet of Coca Cola Amatil. The fund looks to invest in different sectors related to the F&B business including distribution, consumer interaction and experience, environment and sustainability, and future technologies.
The venture investment is one of three initiatives carried out under Amatil X. Apart from making minority investments into tech companies, the platform also holds internal accelerator programmes for Coca Cola Amatil employees and scouts for startups to be connected to and partnered with the parent company.
Editor’s Note: This story has been updated to include details from the press release that was issued hours after we carried the story exclusively.