Pakistan’s Trukkr announces $6.4m raise as it shifts focus to fintech

LAHORE: Pakistani startup Trukkr on Tuesday announced that it has raised $6.4 million in a seed round to scale as a fintech (financial technology) company, rolling out lending products for truckers. 

Trukkr’s round was led by fintech focused VC firm Accion Venture Lab and Sturgeon Capital in the UK, with participation from angel investor Peter Findley,  Haitou Global in the US and Bahrain-based Al Zayani Venture Capital.  

Previously, the startup had announced raising $600,000 in seed funding in 2021. Crunchbase data also shows that the startup earlier raised debt in 2021 and a pre-seed round in 2019.

Founded in 2019 by Sheryar Bawany, Mishal Adamjee, Haji Ali, Waqas Khatri and Kasra Zunnaiyer, Trukkr started off as a marketplace to connect truckers with shippers. However, recently the startup has shifted its focus towards a fintech model. 

“It is very early in Pakistan for a marketplace model,” says Sheryar Bawany, co-founder and CEO of Trukkr. “The biggest problem that we saw in connecting shippers with transporters was that transporters did not have money to do the trips.”

According to the startup, less than 5 % of trucking companies, using Trukkr’s platform, have access to financial services, and often must wait up to 90 days for payment for services rendered. This leaves companies unable to cover expenses such as fuel, tolls, and truck maintenance.  

On the other hand, the small truckers that join big fleets of companies to get loads to ship, receive partial payments from big companies, creating disabling inefficiencies for small truckers.

This one problem alone makes the marketplace model unscalable and Trukkr’s new fintech model presents itself as an opportunity to solve another problem of cash flow. Trukkr says that it fills this gap in financing by using logistics data to  underwrite loans to trucking companies, enabling them to scale their businesses and increase revenues. 

“When we think about fintech lending businesses in emerging markets,  two of the key challenges that startups must solve are data and  distribution,” says  Robin Butler, partner and head of impact at Sturgeon Capital. “This data challenge is exacerbated in the opaque, offline  trucking market in Pakistan and the participants have historically  been chronically underserved by traditional financial institutions.” 

“We have built a powerful engine of  growth and inclusion, with a unique origination and an underwriting model built for developing markets, which has enabled us to grow smartly, safely,  and scale-ably across an ever-changing global economic landscape,”  says Mishal Adamjee, co-founder of Trukkr.  

The startup has been able to secure a non-banking financial institution (NBFI) license from the Securities and Exchange Commission of Pakistan (SECP), says Sheryar. The fintech focus also does not mean that the startup would scrap the marketplace model entirely. 

Over the past 12 months, Trukkr claims it has been able to add more than 20,000 trucking companies onto the platform. Sheryar further disclosed that they have also shunned growing aggressively on the back of discounts and are hence more sustainable. 

The startup plans to use part of proceeds from the recent round for lending and will also be partnering with banks in this regard. Its other plans include expansion of the services and raising a bigger Series-A round this year.