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Making Fleet Management Smarter | Vidit Jain and Shridhar Gupta @ LocoNav
175 Plays3 years ago
When it comes to innovation, India has come a long way. But there is still a lot to be achieved!
In this edition of Founder Thesis, Akshay Datt speaks with Vidit Jain and Shridhar Gupta, Founders, LocoNav. They have worked together at ClearTax before starting with their entrepreneurial journey.
Intrigued by the complex nature of the fleet management business and to make the life of fleet owners easy, Vidit and Shridhar founded LocoNav in 2016, with a mission to democratise access to cutting-edge technology for commercial fleet management. And today LocoNav is operational in 25 countries and is backed by global tech leaders like Anand Chandrasekaran and Ajay Agarwal.
Tune in to this episode to hear Vidit and Shridhar speak about how LocoNav is streamlining the fleet management industry by providing AI and IoT-led innovative offerings.
What you must not miss!
- The pivot from freight marketplace to a transport tech venture
- Scaling-up and fundraising journey
- The unique product portfolio
Recommended
Transcript
Introduction to the Podcast and LocoNav's Founders
00:00:00
Speaker
Let's take a look at the video. Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
India's Startup Ecosystem and Infrastructure Challenges
00:00:26
Speaker
Hi, I'm Vidit. Hi, I'm Sridhar and we're the founders of LocoNav.
00:00:30
Speaker
In the Indian startup ecosystem, the last 5 years and I would say the next 5-10 years are all about fixing plumbing. What do you mean by plumbing? For example, payments is plumbing. Getting money from one party to another party through various pipes.
00:00:49
Speaker
Something like a UPI built a better pipe to fix this plumbing issue. The other big plumbing issue facing the Indian economy is logistics. We are traditionally a country which has much weaker physical infrastructure, be it roads or
00:01:07
Speaker
railway or shipping than advanced countries. However, I believe that just like we did it in telephones, like we in a way skipped the whole landline part of the journey and went straight to mobile telephony. Similarly, we will be able to overcome these physical limitations of our infrastructure by using machine learning, AI, IoT devices to make logistics more efficient.
00:01:35
Speaker
And today I'm speaking to Sridhar and Vidit, who are the founders of LocoNav, which is one of the pioneering companies in this field.
The Journey from ClearTacks to LocoNav
00:01:43
Speaker
Here's Sridhar and Vidit talking about their days together at ClearTacks and how that led them to become co-founders in LocoNav. When I had ClearTacks, we didn't know each other as well, except as colleagues. And then, you know, once or twice, you know, we went for meetings, as Vidit described.
00:02:04
Speaker
But we had a third colleague called Rishab, who I was very close to at Cleartax. And then he was also friendly with Bidith. So I think that's what led to a brainstorming session. And in fact, just around the time when we were leaving Cleartax, that's when I got to know Bidith better. Otherwise, through most of the journey in Cleartax, it was more very professional.
00:02:34
Speaker
and you know it was Rishabhu that was actually the connecting factor so then the three of us left Kia attacks and you know what was the idea that you left with so when we left I think there wasn't there wasn't any idea honestly
00:02:56
Speaker
Yeah, it was just that... We'll figure it out. Let's get out and figure it out. There were a bunch of things going on ahead. But I think the one thing that intrigued us was digitization for SMBs.
00:03:13
Speaker
So, you know, we were looking at lots of clear taxes also in that space only in a way, like they were also digitizing in front of us. Yeah. While we were there, it was more, there was more action around, you know, personal tax filing and then, you know, and, you know, either directly or through enterprise partnerships or banking partnerships. Now, of course, it's a very different business where, you know, I think enterprise is probably key. Yeah. And DST made that pivot happen.
00:03:42
Speaker
Correct. But it was slightly different back then. But when we left, I think there was just general intrigue around digitization for SMBs, B2B. So thinking across the board, lots of different ideas, very, very wide variety of sectors, including education, et cetera.
Challenges and Pivot in Transportation Sector
00:04:05
Speaker
Someone we were speaking to told us, hey, you should
00:04:08
Speaker
you should check out transportation. And also in our journey of meeting lots of different types of SMBs, we came across a few free donors. So I think that then led us to, we found that business a lot more complex than a typical trader or a wholesaler, right? Where all the
00:04:34
Speaker
Everything that was required was in the place of business, but in the case of a fleet, everything was out there on the road, all the liabilities, the driver and all the stress factors for the business owner, leading to greater lack of visibility.
00:04:52
Speaker
I think that intrigued us and we went deeper into meeting more fleet owners to understand where were their struggles, what were some of the areas that they needed support in. Initially during our conversations, the one thing that stood out was, and maybe we
00:05:11
Speaker
We went in also with some preconceived notions, was around the whole freight marketplace opportunity. So we started a pilot under the name of a company called Baba Trucks, trying to build a freight marketplace, aggregating demand supply. So the three of us had great responsibilities. Someone was building supply, someone was building demand. Then we used to meet in the evening in a hotel room and sort of try to match that on the phone.
00:05:42
Speaker
But what is the demand here? There's like corporates, like corporates who like say factory say go down, stuff like that. Either corporates or large transporters. So actually, while building the freight marketplace, we realized that, okay, there's this other opportunity which is actually like a much more low hanging technology problem.
00:06:05
Speaker
which is relevant to everyone, right? Not just to truckers who don't have access to business, but anyone with or without access to business and even outside the trucking community, other commercial vehicles, taxis, buses, tractors, earth mobiles, right? Everyone had this standard problem of, hey, I need to know where my vehicle is, I need to know what it's doing, I need to know how much fuel is spent. I think
00:06:31
Speaker
As you know, at some point, the freight marketplace opportunity did not continue to excite us as much. And then we slowly started pivoting towards that. So we were in between Bangalore and Calcutta, then we moved base to Delhi. And that's when we started working on this, right? That, okay, how do we, how do we, you know, build sort of great fleet software for all these folks, you know, who need to know where the vehicle is? With it, I want to hear from you, like,
00:07:01
Speaker
What made you relate to this audience? Like, I mean, you know, like, this is not an audience that you would have ever interacted with. What made you want to solve for them? See, I would say two things. So first of all, I think somewhere down the line, you know, since both of us, you know, families have been in business and, you know, drug was logistics or something, which is always a problem, you know,
00:07:29
Speaker
So it was something which was, you know, we have been hearing, you know, something just say, I think secondly, you know, that realization, you know, some things, you know, the dots when you connect, right. So I think we always used to hear that, you know, if 50 paisa of, you know, diesel prices increases. Right. So, but there was never this question.
LocoNav's Vision and Technological Solutions
00:07:56
Speaker
Right? But the car runs for probably 10,000 kilometers. But then specifically for fuel, right? Probably private car runs not even 10,000 kilometers in a year. That's 5,000 rupees. But for a trucker, right? It used to be everything. And then, you know, if you take a derivative, then it's probably everything, you know, everything that you're eating, everything that is around you came through a truck or any commercial vehicle.
00:08:24
Speaker
or if someone is going from point A to B. So when you connect those dots, then it's like it's so huge. It's almost everything. And if you build a software, and typically a truck would run for cost would be probably somewhere between 35, 40 rupees per kilometer. And you're talking about a lakh kilometers in a year. So now you're talking about spending 40 lakh rupees a year. And if you can optimize that, if you can optimize
00:08:53
Speaker
Let's say four rupees in that, right? So then the halal will be at least eight times, you know, then, then the fuel diesel prices. So, so I think that, that thought, you know, at least to give the scale of the problem and scale of the opportunity. What was like the product vision? Like, was it just like a software to manage your fleet and
00:09:17
Speaker
have a nice dashboard which helps you to take good decisions. Was that the vision or what was the vision like? So I think there, yeah, sorry. So, you know, when we started
00:09:32
Speaker
building Lokonav. We knew the market was price sensitive, but we obviously didn't know the extent to which it was. You know, it was the first time we were also doing B2B software. So the idea always was that, you know, like we did said, that if it's a product that's bringing them ROI, where they're seeing savings, where it's helping them, you know, do decision making around,
00:09:59
Speaker
around cost management and helping them control fuel costs, et cetera. There shouldn't be any reason why folks will not pay for this technology. And at that time when we launched the product, the market was full of these old school solutions or these US-based companies that were charging obnoxiously high prices, which is also one of the reasons why penetration was fairly low. I think when we started
00:10:28
Speaker
The idea was, how do you democratize access to this? And at some point, if it's free, sure. How do you democratize access to drivers, to fleet owners, even those who cannot afford this technology? We'll figure out how we can sort of bundle it with other services and make it affordable for them.
00:10:50
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show. What was the product you wanted to make? Was it like a routine software or what was it exactly like?
00:11:17
Speaker
For listeners who are not from that great industry, help them understand the product. What was it that you wanted to build? The product in the beginning was quite straightforward. Nothing fancy about it. You're a fleet owner. You need to know where your vehicle is. You need to know what it's doing. You need to know how your driver is driving. You need to know what kind of consumption is happening in your vehicle.
00:11:44
Speaker
And so putting in an IoT device that was capable enough to capture all of that and giving them that visibility real-time on an insightful dashboard, which is easy to use. And even though most of the fleet owners or fleet managers were very, very new to technology or to using smartphones, so it had to be very, very intuitive, user-friendly.
00:12:11
Speaker
And that's that's honestly all that we focused on that great build great visibility software for these fleet owners so that they stop calling their drivers for eight hours a day and you know focus on you know other aspects of their business life becomes easier for them and and then over time once you
00:12:32
Speaker
have this technology deployed in a large number or a large network of commercial vehicles. Then of course, the customers, the users are also hooked on. They're also used to using that technology daily. And then you can, of course, start giving them deeper insights, better reports, start encouraging them to deploy different types of sensors, which give them more information about the vehicle, diagnostics, et cetera. OK, like upsell opportunities.
00:13:01
Speaker
Correct correct so the initial goal was keep it simple give them a good basic visibility tool and just get this out there in the hands of thousands of fleet owners. Hardware is something which you obviously had zero experience of I mean with it was a coder you know so how did you figure out the hardware piece and.
00:13:22
Speaker
Because I mean, you know, that would have been like a fairly new problem for you to solve. So, I think, especially for I think, if I talk about products, right, so, you know, you'll find so many products where
00:13:36
Speaker
The first problem is to get users to start entering data into the product. So for, I would say, lots and lots of products, that's the core problem. How do you start engaging them? I think data is very important. People have to post photos on Instagram. Otherwise, it's useless.
00:14:01
Speaker
For us, that wasn't a problem. If you look at the other side, brighter side of the product is that there's always data which is coming to us. So we are somewhere like, let's say, Datadog. Datadog is a company as big as Twitter.
00:14:18
Speaker
Right? Yeah, you haven't heard of them, right? But what essentially they do is, you know, they build this layer of monitoring over servers, right? So where essentially server is an IoT, which, you know, sends all the data back to data.org. And, you know, they can build logging solutions, application monitoring solutions. But there's always a very good view of data to them, right? So that's not knowledge data would come from anywhere. So data would come from your own hardware would come from a third party hardware. So
00:14:45
Speaker
It essentially becomes irrelevant after you know, you know, let's say have some critical mass, you know, initially, no one knew about open apps, you had to go and put your own hardware, but then, you know, slowly, steadily, they were, they were vehicles which already had a hardware. So, you know, we started getting that data on our platform, and now probably we support almost 2000 different kinds of hardware out there globally, supported by open app, right? So we built that layer.
00:15:11
Speaker
you know, that protocol layer which could talk to all these devices.
Data's Role in Business Model Evolution
00:15:16
Speaker
And we kept, you know, we still keep on increasing that number. That's a very crucial KPI for us, right? So, like how Android works seamlessly with almost every OEM that is out there, right? So, think of us like that. And since, you know, now if I talk about the product, then
00:15:36
Speaker
You know, data is always there, right? That's how data will always be there. But now there's infinite possibilities, you know, infinite possibilities. So I'll tell you how a small example will get you. So you're constantly getting this feed of lads and logs, right? Where your data is going. But that data, when you talk it up with some order, let's say you say that, you know, here a transaction happened on fuel. So now you know that it's a petrol pump.
00:16:04
Speaker
Right? And so that simple information can now, you know, you would, you know, do you have the petrol pump, you could know what the fuel price at that point of time is, you would know, you know, what's the DAT around the petrol pump, how much, how big, how big is the Q, you know, how much time people are taking to, you know, fill fuel there, right? Similarly, talk about tools and, you know, you could start creating insights when you would say, I'm very sure that this truck went to fuel pump three times in the trip.
00:16:34
Speaker
And you start asking them, nudging them for more data. So see, that's the advantage that we have on our platform. And it keeps evolving. So you keep getting more and more feeds. So you also now put a camera on the vehicle. So you start getting feeds around.
00:16:53
Speaker
you know, not just the location, but also the image, right? So you could see where the stop sign is, you could see where, what is the speed limit, you know, you could see the driver is changing the lanes. There's also a camera which faces the driver. So you could see if he's drowsy and you end up creating, so you're not scrutinizing the driver, you end up helping him, right? So you're telling him, you know, you know, there's a DAS opportunities, you know, how do you make roads safer for everyone, not just the driver?
00:17:22
Speaker
So, and then, you know, feeds around you, hand him a card. There's a, there's a toll tag that sits on the vehicle. So it's also IoT in some sense, you know, giving you back all the data around tools. So you keep getting all this data, all this feed all the time with each and every product that you launch. We also launched an app that sits on the driver's phone. So all the stimulus that the driver takes, you know, starting a trip, ending a trip.
00:17:43
Speaker
you know, stuff like that, you know, start starting the petrol bill. And so for us, you know, it's like data stream, some would come through solutions that we deployed, some would come to a solution that, you know, vehicles already have. And you know, we are just collecting all these feeds and you know, you know, creating insights, which are not helping just them, but everyone in the ecosystem.
00:18:09
Speaker
So, yeah. Okay. So, like, you know, when did this realization come that data is like the oil here that you're mining? So, I think, you know, fairly early in our journey as we started realizing that this is not going to be a software only play, right? And, you know, there is this entire ecosystem that we're going to ultimately end up building, right?
00:18:36
Speaker
And also because like you rightly said, it is a price sensitive market. So we actually also actively started thinking about what else is it that this could ultimately evolve into. And that's when the realization dawned on us as we went deeper into what was going on.
00:18:55
Speaker
especially in developed markets like the US, that the data that's getting generated from fleet management, or telematics, or IoT, or whatever you might want to call it, was invaluable to insurers, financers, weather companies, governments. Everyone wanted access to this data to mitigate their risk, to better plan their products, to sell better solutions to the end user.
00:19:24
Speaker
And so we obviously you know
00:19:28
Speaker
started making big plans around how this data could get used in the ecosystem by other service providers. But then again, it didn't work out as it was ideally planned because even in our country, there were a bunch of regulations which don't allow all service providers to basically base their decision, finance decision making or insurance decision making on this data. That change is still coming.
00:19:59
Speaker
But yeah, I mean, we see that over time as more and more vehicles, commercial vehicles come onto our platform, the dependency for the service providers on us increases as we're able to provide them more insights on how those fleets are running and what is the ideal or the best product for their fleet. In fact, now in a lot of parts of the world,
00:20:25
Speaker
you know, finances, insurers, tire manufacturers, etc. are now mandating an IoT device at the time of purchase of the solution, right? Because they want to keep, they want to keep a view on how it's being used, they want to keep a view on what's the risk, etc. Okay, okay. So tell me about your go to market, like you figured out a hardware, software solution, I'm sure with it would have
00:20:52
Speaker
created the application part of it and figured out the hardware. So how did the go-to market
Market Penetration and Investment Journey
00:20:58
Speaker
happen? How did you get your first customers on board and tell me about that process actually going from zero to one? Correct. The go-to market has evolved drastically over the last few years as it does, I guess, for most young companies. So initially, our go-to market was two-pronged. One was to
00:21:21
Speaker
you know, build these. So because I came from, you know, a background of, you know, distributing or distribution of products, right? I thought, you know, why don't we go make resellers, right? And, you know, why don't we go create distributors or dealers who will sell this for us in the local market, who might already be catering some other product to local fleet owners, maybe their tire dealers, maybe there's something else. So that was one part of
00:21:48
Speaker
And they would sell like the hardware software both. Yeah. So it was just one bundle that came. And then the hardware was a tangible part of it. And then of course, when the device got installed, the product went live. And it was easy to install. Say you could buy it from a
00:22:10
Speaker
auto parts dealer and that auto parts dealer would install it yeah so it required some early training but typically someone who was already catering to commercial vehicles you know had that you know had some mechanic or someone who could do it right yeah install it right so i think initially the strategy was two-prong work with resellers or go to enterprises right now in enterprise what we mean by enterprises is that you know going going to a large
00:22:39
Speaker
FMCG company, a large manufacturing setup, a large cement company, and tell them that, hey, you have these thousands of vehicles moving your goods, right? And you need visibility, right? So why don't you mandate our solution on the fleets that are working with you?
00:23:00
Speaker
And you get visibility and for them also is beneficial right so you know one of India's largest FMCG players actually was someone who we initially started piloting with, they liked the product,
00:23:16
Speaker
In fact, through them is how we got our first customer because they decided to mandate it on one of their regional setups in East India. That's how we got our first two large fleet owners because the FMCG company told the two fleet owners in that region that, hey, I need distribution and visibility because till now I've been
00:23:41
Speaker
you know, you know, tracking this data manually, I have analysts who keep tracking turnaround time. But if I have this device, you know, then I can sort of do that through the dashboard, right. And for you also, it's valuable because you know, you will also be able to sort of get real time visibility, etc. So,
00:24:03
Speaker
And what was the pricing, hardware and software? Right. So initially, like I said, you know, when we launched on the market, the pricing was anyway fairly on the higher side. So we used to charge about $100 a year per vehicle.
00:24:18
Speaker
A little bit less, about $90 a year for India. That's right. But again, because that mandate was coming through that large FMCG company, we didn't feel the pushback early on. Because in the free to know, my customers telling me to do it, I'll invest in this technology.
00:24:40
Speaker
So the first few months we didn't feel the heat, but as we went deeper into the reseller network and these resellers started selling to local fleets, that's when we realized that there's still a price discovery that's left to be done.
00:24:57
Speaker
And then over time, of course, you know, the price has come down a fair bit. But then again, like I said, the goal always has been that how do you democratize access to this technology? Maybe at some point in the future, maybe, maybe this technology becomes free, right? And then, you know, monetization for us or for companies like us, you know, lies elsewhere, will definitely lie elsewhere, right? Especially in a market like India, right?
00:25:26
Speaker
Right, okay, okay. And what was the cost of the hardware? So, I mean, not the hardware, you know, cost us anywhere between 15, $20. So at that time, now, of course, you know, over the years, as we've, you know, been able to customize the solution, scale is a little bit more. So we have, you know, hardware built to our requirements at a much lower cost.
00:25:55
Speaker
Okay and so far this was self-funded. Yeah absolutely self-funded then towards the end of 2016 we realized that you know we will need some capital to scale up you know we were pitching to larger institutional investors but
00:26:11
Speaker
they did not find this opportunity as exciting and it was probably also a bit early for them to come in. So we were able to put together a small round with injured investors, quite a small round actually. Again, because no one in India had before raised capital for fleet software. I'd say, I think outside of China and Asia, no one had really
00:26:37
Speaker
raise capital for free software. So for most people, the problem looks interesting. It's obviously a very large industry. There are many, many multi-billion dollar companies that have gotten created in this space in Europe and in the US and now in China also. But these are emerging markets. People won't pay for software.
00:26:59
Speaker
You know it'll be hard for people to understand what the product does so we're not sure where this is really going right so you know that was the general pushback from most investors that we met but you were lucky that you know we had a few early engine investors who believed in us backed us and then you how did you find these angels like so I think was it like cold even not cold
00:27:23
Speaker
uh you know uh you know through our network of friends and family you know siblings etc i think we got introduced to a bunch of people through that uh and do you think that the institutional vcs the challenge there could also be a pedigree issue that if you had been say iit iam combos they would have
00:27:47
Speaker
you know, maybe better the combination figuring things out? No, I don't think so.
00:27:55
Speaker
I don't think that was the reason. I think at that time, there was a wave around other opportunities that institutional investors were more excited about. Fleet software, something that had never raised capital before in India, was anyway something that would invariably look fairly unsexy. Or maybe if you were doing a fake marketplace, there would be more interest.
00:28:24
Speaker
But yeah, I don't think that was the reason by then. But yeah, and also I think, you know, Akshay, I think fundraising also requires good sort of storytelling skills, right? On, you know, what this is ultimately going to turn into.
00:28:43
Speaker
And I think that is also something that, you know, visits when we were not so great at very early in our journey. So I think maybe if you were better at that, so, you know, maybe you'd have gotten a visa. I guess the story itself would have evolved. No, at that time, you probably didn't realize the value of the data. At that time, probably you were pitching it as a fast
00:29:06
Speaker
that subscription based revenue. So I think it was a bunch of those factors.
00:29:16
Speaker
So end of 2016 is when we got some angel investment. And then early 2017, we bought one more angel investor, which kept us going for a few more months. And then towards the second half of 2017 is when larger VCs started showing interest in us because we had
00:29:41
Speaker
profitably gotten a reasonable amount of traction. We had a few thousand vehicles on the platform using us, some marquee names using us. And the pricing was that $90 only? By the time actually the pricing would probably fall into about $60. Plus there was also the reseller model. So, you know, a little bit average end user pricing was about $60, but average would probably for us would be about $45, $50.
00:30:07
Speaker
So there, by then, I think there was just general intrigue that, OK, guess this is a large opportunity globally. And at some point, fleet owners in India will also start using this. And it seems like these folks have figured something out here if they've been able to scale up with such limited capital. The product looks great. So I think also around that time, what helped was in the US, Samsara and Keep Trucking were really coming up.
00:30:37
Speaker
Samsara, I think this raised a large round for Mendezan. So in general, globally, there was some more excitement around the whole fleet software space. So when was your first institutional round? And how much did you raise in that? The first institutional round was in end of 2017. And this was a $3.5 million investment by Sequoia. And subsequent to that, take me through that entire fundraiser.
00:31:06
Speaker
So once Sequoia came in, then how did that change your trajectory? How did you use it? Yeah, so once Sequoia came in, then we were less stressed at the time of payroll or salary payments. Because we had money in the bank, which every week of every month used to be a bit of a struggle.
00:31:28
Speaker
But I think at a more strategic level, we could invest in engineering, we could invest in tech and product, folks that we just could not afford to hire before, except a few people who took the chance to come and work with us at very low salaries. And we were very lucky that very early in our journey we had a few people who
00:31:51
Speaker
who believed in us and believed in what we were doing. So I think one, the first investment was primarily made around tech products.
00:32:00
Speaker
and engineering, basically. And then, of course, it also gave us the firepower to double down and expand our sales team to go out there to meet more enterprises. Also, by then, we realized the reseller strategy was not super scalable in the way we were doing it. So then we were like, why don't we just build a large team ourselves, a large sales team ourselves, who's going to go directly to the fleet owner and sell?
00:32:27
Speaker
So then you know we started investing in building a large sales team and then of course you also had to invest in operations and customer support team that would you know support that sales infrastructure. And meanwhile like meanwhile with it what was like the product journey happening is you know from 2016 till about when the Sequoia fund started getting deployed.
Expansion into FinTech and Strategic Adaptation
00:32:50
Speaker
So I think
00:32:51
Speaker
From the product side, lots and lots of different kinds of users came on the platform in one go. There was someone who had 2,000 trucks. There was someone who was sitting out of Chakra and had one truck. Because they were resellers also, they were owned by sales also. We were also investing in building industrial products since it was
00:33:15
Speaker
You know, it was very closely linked because, you know, largely the technology, the core platform is something, you know, which can power lots of manifestations. This was post Sequoia or even pre Sequoia? This started 15 days after demonetization hit. So that's probably first, probably first January, 2017. So pre Sequoia. But then it wasn't at a very big scale.
00:33:39
Speaker
So we launched our own wallet on the app that a feeder could use. And it was the first time when a feeder remotely pushed money to a driver. Otherwise, just imagine you are doing a tele-to-morbid trip. It's a six-day trip back and forth. And then you have to give all the money on day zero. Now you have the power to push it real time. And then there wasn't any working capital blockage that was happening. But how did the driver use that money?
00:34:09
Speaker
loco nav water, how would you use it? Yeah, so there was a there was a car that you gave to the driver and that that car could be either swipe at an ATM or swipe at a toll or you know, anywhere. So so that happened. So there were so many things that were you know, just like this is like a fin taken itself now like this.
00:34:30
Speaker
Card for employee expense and I mean there are like like happy the fintech which does only they're sure like How did you see you're not we're not building these solutions. That's the whole point, right? So even though they're all we were partnering with people, right? So I think We so probably in not just in services also in products. So just think of any GPS company, you know you know, it has probably let's say five thousand vehicles and
00:34:58
Speaker
uh, you know, uh, sitting somewhere in, let's say, uh, some part of, uh, uh, South India, let's say, right. So it's pretty restricted. It's, it's a local area network of 5,000 vehicles, you know, which has, uh, which does not have access to the best technology, you know? So I think that problem statement, uh, remains the same for us. I mean, it was the same on day one, many started Lopana that you need to democratize
00:35:27
Speaker
the access to the best technology and the best service to a fleet owner who would be sitting anywhere in the world. So how do you do that? You can only do that by first bringing them on the platform and then opening up your platform to more and more services and products. What they lack access to is the access to the users and more than that access to the right users. So I think that is what we're solving and now we're solving internationally. Internationally it's a bigger problem.
00:35:57
Speaker
So how do you make software available to someone sitting out of Kenya? And there is a company, there's an Israeli company which has built a really great engine diagnostic product. But how do you make that available to someone sitting out of Kenya? And then at the right price, and for that developer to maximize their income also. So something like a Play Store which does not
00:36:26
Speaker
only give you product, they also give you service. So they give you a game application also, but they also give you an Uber, which is a service, right? Okay. Okay. Okay. Super interesting. So your version one product was probably just something which was taking location data and showing it. That was version one, which started in July, 2016, but then demonetization, demonetization hit in December, 2016. So in six months, it became a FinTech product also, right?
00:36:53
Speaker
So we kept making it more and more vertical as we went ahead. So I think it was a great year of everyone was probably working towards their base and everything. We were trying to convert every possible customer who had any link to
00:37:16
Speaker
a commercial vehicle. So, it could be a, so we're not just working with trucks, right? So, it could be a tractor also, it could be a taxi also, it could be a school bus, it could be a ambulance, right? Any, any vehicle which runs for a P&L, right, is going to take advantage of this technology. And as I said, it's the core technology that sits at the center, which revolves around a vehicle as an atom.
00:37:41
Speaker
And then there could be possible manifestations of this product. So there could be a product which manifests into a cement use case, which manifests into a large-mile use case. Describe to me how the stack or these things that you kept plugging in, how they were happening. What were the things that you were plugging in one by one?
00:38:04
Speaker
A wallet is something you plug them in. So let's say we plugged the wallet first. Now so many things could be plugged to the wallet also. So there could be a total fast tax system. There could be expense management system. There could be the other purchases that you do. If you want to buy tires or if you want to. There are loyalty fuel card programs that the fuel industry is running. So they could also be attached.
00:38:32
Speaker
So it's, and we're talking about, we're talking about 40,000 rupees per vehicle per year. So it's like huge amount of money. Then, you know, take a step further and you know, you start integrating with their ERPs. Obviously, the smaller ones won't have any ERP, but you know, when you write for them, you are the ERP. Absolutely. But then, you know, there are people, you know, if you go beyond, let's say 30 vehicles, 25, 30 vehicles, there's typically an ERP in place and
00:39:04
Speaker
Some data has been stored there. It's obviously not real time, but there's something there. So you start exporting that. And here you start bringing all their employees on the product. So how do you solve that? So start working on that. Like a login for a driver, a login for an accountant. Absolutely. So for the finance team, the finance team would manage the wallet.
00:39:29
Speaker
There's a fleet managers who, you know, will speak to the driver. So all the communication happens there. You know, they start creating routes. So like you integrate it back also. Yeah. So I think here probably WhatsApp was something that, you know, was fairly important. So we use WhatsApp, you know, try to make the products more passive than being active. Right. So how do you make that passive?
00:39:56
Speaker
so that a single fleet manager could manage more vehicles. So if right now they're managing, let's say, eight vehicles, how do you make them manage 25 vehicles? So that was a very big problem for us. Then now, if you're owner of that fleet, so you don't want to get into ops, what should be the view that goes out with the owner? And so I think that kept happening. And then, obviously, around resellers also, so what should you show it to your resellers if they also want to see something?
00:40:27
Speaker
And then obviously they were on the product side. What would a reseller want to see? I mean, what does he care? He sold the product. He's got his mark. Again, resellers would not just be pure resellers. They would also be, you know, OEMs. They would also be, you know, people who make consumables, mobile oils, car dealers.
00:40:54
Speaker
Very often card dealers want to deploy this because they want to track when is the next maintenance due so that they can reach out for more business. Or very often a financer or insurer wants to deploy it because they want to track. Financers actually very actively do this because they want to track the risk with the moving asset.
00:41:21
Speaker
There was one meeting with one of the banks, say their name and you know, there was this very big fleet, I won't say the name again, Bejata Delhi, which had probably 2000 vehicles, 2000 commercial vehicles and they defaulted on probably 1500 of them in a matter of a year or something. And six months before the bank knew, we knew that they were going to default. And that happened.
00:41:52
Speaker
That was because you were tracking what mileage they were doing. So literally they stopped running. Now that visibility was with us. The bank didn't have that visibility. And I was telling the story to the same bank in Bombay. And see, it could be a very small signal, but then it really could de-rescue from a very big. And we're talking about a truck that probably cost 25 lakh rupees.
00:42:22
Speaker
It's not a car ride. So even that small signal could probably help you diminish your risk. So these financiers would essentially, again, act as people who mandate it rather than your actual paying customer. They would mandate it and then the customer would have to buy it. It depends. Financiers typically try to get the customer to invest in it.
00:42:52
Speaker
So it really depends like there's no And when did you like so FinTech was one major addition you did What else was there like did you also start offering other kind of services and products on the platform like say like tires as a use case or
00:43:11
Speaker
like the servicing of the truck and you know like tell me about that yeah so we did actually temporarily launch a tire marketplace which you know prior to covid we had to sort of close down because we
00:43:26
Speaker
We decided to sort of pick it up again once we were at a little bit more scale. But yeah, again, the idea was there are fleet owners on our platform who regularly need to replenish their tires. And we were also trying to identify how we could use that data with
00:43:46
Speaker
you know, with the data of the telematics device, right? So that, you know, we could feed back to them, okay, that, you know, life of the tire is 100,000 kilometers, you know, it's already run 30 or 35,000, right? Plus, trying to work with, you know, resellers and OEMs, trying to figure out how we could build some kind of technology around that visibility as well, right?
00:44:09
Speaker
In fact, as we speak right now, you know, we're working with this biotech company in the US where we're building, trying to build a product together around, you know, helping fleet owners.
00:44:22
Speaker
You know better track the life of the tires ensure that you know, there's optimum performance There's sort of minimum deterioration of the tires, right? So yeah, so tires was one thing we did and then of course a lot of other experiments we ran we ran experiments around fuel cards We ran experiments with you know used vehicle marketplace So yeah, most of these okay
00:44:47
Speaker
Are these all running? Tell me about the results. Many of them, I think what's running well right now is, say, the payment solution. Fast type, for example, the toll payments. Then we also work with certain, I would say, companies who want data insights around what's going on with the assets that they've mandated the solution on.
00:45:14
Speaker
So right now, Akshay, we're more focused honestly on zeroing down on, you know, getting a larger number of folks on the platform, right? Because yeah, on the core platform because we know that, you know, the marketplace is something that we've
00:45:34
Speaker
Try it experiment and it worked out successfully and you know some products like today but the focus right now I mean the value of telematics is across pretty much anything that a commercial vehicle owner needs to consume today whether it's finance
00:45:52
Speaker
This kind of data is basically called animatics. But the data that gets generated from an IoT device on the vehicle is valuable to pretty much any service provider to that commercial vehicle owner today.
Global Expansion and COVID-19 Strategy Shift
00:46:07
Speaker
So the idea is that we realize long term that's going to be a no-brainer expansion for us.
00:46:15
Speaker
Right now the goal is to just zero down and expand on getting the software out there in as many fleets as possible So tell me about going global like when did that you've been talking about global since since 2019 Honestly, no one had expected something like who would to happen. So in the end of 2019 we actually
00:46:44
Speaker
One quick question. So, 2019 you had another round also? It was still 2019 released another round, which was again led by Sequoia. And we had another investor join. And then end of 2019, that was about $6 million. Yeah. Okay. They're like a series A plus. Yeah. So yeah. So,
00:47:14
Speaker
Yeah, so then, you know, in 2019, we started thinking about going global. You know, we had reached out to folks in Southeast Asia visited the market as well. We had done a fair amount of work ready to launch in early 2020.
00:47:28
Speaker
but then you know around February as you know quarantine started getting announced so we obviously had to sort of pull back on all those plans plus the idea was also to time it along with the with the fundraise right and then of course because of covid you know business took a hit so even those plans had to sort of be put on the back burner temporarily so so then you know
00:47:53
Speaker
through the lockdown I think we were just sort of waiting for things to get back to normal but while we were doing that you know we started thinking hard about you know without traveling how is it that we can you know launch in global markets and that's when we were like okay we why don't we just take a completely different strategy we won't you know launch the same we won't sort of
00:48:18
Speaker
use the same gtm as india we will actually you know use a purely reseller model right why don't we because we can't travel why don't we remotely make resellers across all these markets the software is relevant to fleet owners anywhere in the world
00:48:34
Speaker
maybe we'll have to just sort of just build some language capabilities and some other regional nuances to the platform. But it's 80% ready, right? Or maybe some local server capabilities, right? So I think
00:48:51
Speaker
That's when we took a slightly different strategy where we said, let's just go partner with folks in emerging countries who are already in the business of catering to fleet owners.
00:49:08
Speaker
could be anything. They could already be selling some kind of transport ERP or maybe selling parts, services, etc. And so we started doing that. Or maybe they're already in the business of selling fleet software and are looking for a better solution to resell.
00:49:27
Speaker
So we started doing that, started with Africa, Southeast Asia, and initially, and of course, also because of COVID, right? It took some time for, you know, folks to build trust, sign up. But once they started using the product, once they started getting great feedback from the users. So today, you know, we're at a point where, you know, we have over 100 active resellers across these countries, right? And now, now we travel also opened up. So we actively, you know, go into these countries and also sort of
00:49:56
Speaker
looking at other hybrid gtms where in certain countries you know we we launch ourselves we want we want to do reseller strategy so so yeah so you know so this effort started at same but q3 2020 and the first
00:50:13
Speaker
Five, six months were hard again because a lot of these countries were themselves grappling with COVID. India still had a short lockdown. There were countries that were in lockdown for seven, eight months at a stretch. But then I think by Q2 this year, things started coming back to normal. So folks who wanted to sign up and were held back because of COVID,
00:50:39
Speaker
Districtions you know they started using the product so now you know and then around the same time we also You know raised raised around expanded our team. That's you know now focused on on selling this product globally And so we're in a great place now, so tell me about the most recent round so
00:51:01
Speaker
A few months ago, we raised a round from some great global investors, so Anthemus, which is probably one of the most active and largest insurer tech investors, they came on board, quiet capital again.
00:51:15
Speaker
a great investor from the U.S. They joined. We had RIT capital partners. We had uncorrelated, started by Salil, who used to be at Bing Capital, then Village Global. So, you know, a good set of investors who understand the space, who are global in nature, the ability to also open up a lot of strategic doors for us as we came into new markets.
00:51:42
Speaker
lots of learnings also from them because of their experience in investing in this industry or related industries. And yes, we were lucky to have had their support to back us and it was a $37 million round.
00:52:00
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com.