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Almost everything we see around us, from houses to furniture to cars, was made possible because of goods being moved from one place to another. Without proper transportation services in place, we might be living an extremely different lifestyle today. Ontruck is one such logistics and transport company, whose goal is to build a network of carriers with high efficiency by using technology.
The Madrid-based startup is growing exponentially and has a 150 percent yearly revenue jump to prove it. To strengthen its executive management team, the company has hired two top-level executives. Nolan Andelin, former Senior Manager of Product Operations at Uber, and Samuel McGuirk, former Head of Global Operations at Just Eat. We learned more about the company from the Cofounder and COO, Rika Christanto, and here are seven things you need to know about the startup.
Christianto’s story and how she joined Ontruck
Rika Christanto is the Co-founder and COO of Ontruck and it’s an interesting story of how she joined the startup. Christanto arrived in Spain after her marriage and was definitely new to Madrid. Previously working as an investment banking at Morgan Stanley, she took several tech companies public, especially in China. The executive says that’s where her first real interest in tech came from, after observing how quickly tech companies can transform their industries.
Her first foray in into logistics was at a six-month project in Uganda, where they were setting up a dairy supply chain in Uganda with the NGO alongside the Bill Gates Foundation. With people on bicycles trying to transport milk from villages to the big city, the scene was very different from trucking. However, they formed a kind of a supply chain by setting up different warehouses or chilling stations along the way so the milk isn’t spoiled in transit. This is where Christianto’s interest in logistics was sparked.
After business school, Christianto went ahead to start a separate payments company in Indonesia but she wanted to be closer to the west. Arriving back in Spain, she was looking to join a startup and had a traditional background in finance and consulting. However, she was interested in the founding team of Ontruck, which consists of multiple experienced second-time entrepreneurs, along with a strong CTO, and an established product team. The CEO also had a successful exit with his first startup. “It just kind of connected. You know, you could only take a bet at that stage, on a company but I had a good feeling about the team and that was the thing that convinced me,” says Christianto.
How is technology affecting the supply chain logistics sector?
Christianto says about 80 percent of goods are transported using trucks and, of course, via roads. The technology transforming the road freight or trucking industry is thought to be divided into three different layers, with the first one being ‘pure digitisation of processes.’ The executive notes that trucking is a traditional industry but digitisation of basic processes is a huge step up. These processes include feeding shipment information into a system, finding a truck to transport cargo, tracking the shipment live when in transit, and billing using digital documentation.
The second layer is said to be the employment of data to make trucking more efficient. However, the second layer itself can be divided into three subsets like pricing, dynamic matching of shipments with trucks and using the company’s ability to track shipments from end-to-end in order to figure out how to improve operational efficiency. Coming to the third layer, autonomous trucks are definitely a huge part of the equation. Ontruck is certain, after talking to experts, that autonomous trucking could be a reality in about 10 years and what the startup is doing in terms of building on these layers of technology is going to help the company ready an infrastructure for autonomous trucks.
Ontruck’s unique technology and product offerings?
Explaining the company’s offerings, Christianto says Ontruck has three key products. First one is the shipper platform that enables end-to-end management of all shipments. The second one is the driver app that all drivers onboarded onto Ontruck’s platform can use. All drivers are vetted and qualified and can use the app to accept jobs, track their earnings and do more in real time. Finally, the third product the startup offers is its internal management dashboard, which the organisation’s operation team uses to ensure operations are being run efficiently.
While these products are what the company’s customers get to experience and leverage for boosting their business, powering them all is Ontruck’s technology. While we’ve already detailed dynamic matching, the mobility-startup also uses dynamic pricing. This means that the pricing for a job is decided in real-time, depending upon the weight and height of the goods, distance to travel, and many more variables. The second highlighted technology is the company’s proprietary algorithm that is used to match, assign and route shipments. The data platform used by Ontruck uses data visualization tool and it plays a big role in improving the operations of its clients and carriers.
What can we expect from Ontruck in 2019?
Ontruck’s business model is said to be different from other trucking startups like Uber freight or convoy. The company is quite focused on building network effects within regional trucking transportation to build dependability. As per Christianto, the best way to to do this is by grouping local and forming hubs like Madrid, Barcelona, Valencia and London, and then by connecting these hubs together. The company plans to open additional hubs in France, UK and other countries across Europe.
With Uber Freight planning to enter Europe, how do you think it will impact the industry?
While most organisations would be gearing up and bolstering its offerings to take on the incoming competition, Ontruck has a different viewpoint. The company thinks its a great opportunity to educate the market on how efficient its services are. Additionally, the two companies have different target markets with Ontruck focusing more on local trucking companies while Uber Freight is mostly used for long haul trucking.
Issues faced by the trucking industry that Ontruck would like to solve?
The biggest pain point in the trucking industry is said to be inefficiency. The reason for this is primarily because 30 to 40 percent of trucks on the road are either being driven empty or are highly underutilised. Additionally, Ontruck’s clients ask for more visibility and better transparency for real-time management of resources. This requirement is understood since supply chains are becoming more connected and if the clients get to see more, for example, real-time inventory management, they need to know where their goods are. This level of visibility that the startup provides is said to solve a critical problem.
As per Christianto, there’s also another issue in terms of the level of service one gets within the industry. Truckers and carriers used by clients drive the service, but there’s not been too much clarity and transparency in terms of the quality and service they deliver. This concern is being addressed with the help of intensive data collection with regards to the trucks and the truck drivers being employed, in order to provide the best available service.
Ontruck’s Funding plans and tips for raising investments
Ontruck raised a total of around €36 million in funding over three rounds and its latest was a series B round that happened on May 30, 2018. While always in talks with investors to boost its expansion plans, the company doesn’t have any specific funding plan at the moment since the startup is in a good position.
Christianto claims she’s no expert when it comes to raising funds but outlines two things that might help founders and co-founders gather funding. First advice by the executive is that having a team makes it easier to secure funding. If you are the CEO, then a partner that is on the road with investors will be helpful and a team to bounce off ideas from is also valuable “Because, I guess, being able to share your story, align with investors and bring them on to your side requires a lot of iteration and refinements. You need to test those ideas with someone before you go on the fundraising journey,” reveals Christianto.
The second word of advice is to be extremely clear on what your strategy is, especially in the early stage. “It’s a lot about sharing the dream, sharing the story and something that is inspiring not only to investors, but also internally within the company,” says Christianto. While there are numerous opportunities when one has a startup, being able to drill your entire venture into a simple, easy to digest message is quite difficult. However, that’s kind of what one needs in order to be able to convince investors, themselves and their team.
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