We are delighted to announce our investment in Amitruck, along with Dynamo Ventures. Amitruck is a Nairobi-based startup that connects clients directly with cargo owners, avoiding expensive middlemen. Transporters bid for work on the platform, ensuring competitive prices.
Facing The Challenges of the African Transport System
Transport in Africa is riddled with middlemen: there can be up to three brokers between the vehicle and the cargo owner, and they consume up to 60% of the delivery fee. This causes a lack of security and transparency that greatly increases the cost and liability of transporting goods.
There are four main problems behind the high cost of logistics in Africa:
- Complete lack of systems and data
- Manual and tedious transport sourcing based on calls and network
- Lack of information in delays and loading times
- Limited formal channels of transportation
Despite the challenges, we are strongly positive about the logistics development in the continent as initiatives like the AfCFTA, which is currently being implemented, will boost African intra-trade.
Mark Mwangi is Amitruck’s Founder and CEO. He was born in Kenya, but moved to the United Kingdom to pursue his studies in mathematics at the City University of London. All of this, while driving a delivery truck at night to afford tuition fees. After graduating, Mark started a successful banking career in London being part of a team managing a €5B equity portfolio.
In 2017, Mark left the UK to contribute to his home country, Kenya. In 2018, after extensive market research, he identified the inefficiency of the trucking industry in Kenya, and in October 2018, he founded Amitruck.
Amitruck has developed a transportation marketplace that connects clients directly with transporters cutting out expensive middlemen, allowing companies to improve their margins, reinvest the profits and make the market more efficient.
How does it work?
- The client books a delivery for his load using the web or mobile app. This customer posts the required vehicle, indicates when the delivery is needed and selects the preferred insurance package. The request is sent to a pool of drivers that meet those requirements
- The drivers answer the request with their pricing information.
- The client selects the best option using the price and rating of the driver before making payment.
- The drivers execute the delivery, while the client can track the status.
- The driver is only paid when the client confirms the delivery was successful
More than 90% of the road trade in Africa is done through traditional brokers. Startups are starting to win some traction, but they’re still a minority in a huge market. Digitization is inevitable, though. Amitruck stands out from the rest of its competitors, as they are the only company that offers real transparency to the logistics market, with competitive bidding and instant payments being the best solutions for both, clients and drivers.
According to the Kenya Ministry of Transport, there are 180,000 vehicles that drive an average of 75,000km/year at $1,69/km, which gives us a Total Addressable Market of $23bn only in Kenya. Assuming that 60% of the 70% available commercial vehicles are serviceable we obtain a $9,6bn SAM, and assuming that Amitruck can obtain 5% of the market share, they have a $480m obtainable market only in Kenya.
We have been in contact with Mark for the last 10 months, and we are not only impressed by his incredible growth, but also by his story and ambitions. We were also really impressed by Amitruck’s traction, growing over 300% in the last 12 months despite the COVID pandemic. We are confident that Mark and his team will be leading the logistics market in Kenya and East Africa by bringing transparency and efficiency to the supply chain.
“I look forward to working with the Plug and Play and Dynamo Ventures team, who will bring a massive amount of experience and know-how, both within the logistics sector and also building and scaling startups,” said Mwangi.