Nandan Nilekani and Accel Partners-backed logistics venture, 4TiGO Network, is bringing together various stakeholders of the goods transportation industry into a common technology platform. Its primary weapon: to unclog bottlenecks across the value chain using technology and partnerships.
Founded in 2015 by ITeS professionals, Anjani Mandal (who was CEO of Manipal Technologies) and Vivek Malhotra (who held leadership roles at Genpact and 3i Infotech), 4TiGO Network Logistics is designed as a technology platform that brings together fleet owners, truck drivers, transportation firms and companies that ship goods, into a common technology platform.
For a fleet owner, 4TiGO’s primary value proposition is to deliver more trips, improved utilization of assets (trucks) and therefore greater efficiency. But, that’s not all. The company helps fleet operators access credit lines through its banking partner, Federal Bank, and get discounts on fuel through its partnership with Indian Oil and so on.
The value proposition for a truck driver, as is probably obvious, revolves around better scheduling of trips, lesser idle time and the opportunity to make more money. But, again, that’s not all. 4TiGO offers awards and incentives to drivers for error-free trips, roadside assistance services, scheduled breaks for safe driving and even a 4TiGO-IOC Fuel Card, that gives cashbacks to drivers.
And, of course, for a company that ships goods through the 4TiGO network, there is complete visibility of the package from end-to-end, in additional to reduced cash cycles, thanks to electronic documentation.
Currently, there are over 8,300 trucks on the 4TiGO Network, serving over 500 client companies, primarily in South India. Currently, the company employs about a 100 people, 40 per cent of whom are involved in field operations.
The company raised US $2 million in November 2015 from Accel Partners and Nandan Nilekani and recently raised another US $10 million in Series A, which is primarily being used to expand the network and enhance its technology platforms.
In the first two years, 4TiGO focused on serving key industrial clusters across the six southern states, completing the network with connects to transportation hubs in Maharashtra, Gujarat, Bhopal, Pune, Indore, Kolkata, Mumbai and NCR. In its next phase, the company is adding locations like Uttarkhand, Jharkhand and other parts of central UP and Guwahati to its network.
Only less than 30 out of the 2000 companies that we met said that this technology is not for us. Our value proposition to them was extremely clear.” – Mandal on his experience of pitching the platform to prospective customers
The business model
“We began with a simple thought: In the logistics sector, information availability is restricted as technology is restricted,” says Mandal. The company’s platform brings the transport company and the fleet owner together, so that there is visibility of all the available trucks and the loads put together in a single view. It does this by matching supply to demand of trucks in real time, based on the location, truck and load characteristics, to minimize idle time and maximise resource utilization.
The tech platform offers online bidding, negotiation, complete contract management with fulfilment assurance and payment guarantee, navigation to help drivers find addresses in newer geographies and more. “We identified the challenges faced by every player in the ecosystem and we put together not just the technology, but all the services and facilities which are required to become a user of all the information and increase their efficiency,” he explains.
This translates into the user’s ability to find a load. Mandal gives an example. “If a truck owner works only 15 to 18 days in a month and if we manage to increase that by 3 days, it results in one extra trip and an increase in revenue by 20 per cent.” The co-founder views this as a Stock Exchange for freights and if one adds services like electronic payments, speedy pass through, instant payments and payment guarantees, the efficiency will only improve. “A person gains two hours just on the toll booth, if he doesn’t wait and can pass through with toll tags. Essentially, efficiency is not just about right utilisation of trucks and placement of loads. Optimal routing, electronic documentation and several other factors play a role,” adds Mandal. 4TiGO’s technology platform has also recently integrated itself with GSTN, enabling easier documentation and movement of goods across states.
However, all this does not come easily. As Mandal rightly points out, “The introduction of technology is not as easy as it seems. The main challenge the network partners and platform users are facing is in convincing their employees on its adoption.” The companies, however, did not face issues in signing up the transport company or the fleet owner on to its network. “Only less than 30 out of the 2000 companies that we met said that this is not for us,” recalls Mandal, “Everyone else said this is the future and signed up.” The company also offers a credit line for financing their trips through its banking partners. “Many of them are marginal players and may not be a target segment for a bank. That’s where we come in” adds he.
Partnership benefits
4TiGO has also entered into strategic partnerships with Federal Bank and Indian Oil Corporation Limited. The partnership with IOCL is to deliver a comprehensive solution to the network participants that include payment guarantee, incentives, fulfilment assurance, breakdown assistance and other amenities including rest areas and support services across the country.
The partnership with Federal Bank is multi-pronged as well: technology integration to offer credit lines, online payments, access to banking services, and documentation management for approval of working capital limits.
Growth Strategy
Integrating information technology into a company’s systems and processes is a transformation exercise and 4TiGO is getting ready with the necessary infrastructure ahead in time to facilitate this for the logistics industry. While it has been using mostly direct marketing and feet-on-street sales, it is likely to start looking at various industry networks for its expansion. “We also have investors who are supportive. We have the technology wherewithal and have an excellent team,” says Mandal. Over the next few months, the company’s network will expand to across India, ensuring that the platform will take care of goods transportation needs of a client, pan-India.
On the technology front, the company platform offers data and analytics, multilingual content and has the ability to perform voice recognition to facilitate transaction in multiple languages. There is also a AI-based learning system in the works, which can potentially take efficiency to the next level. Mandal explains, “If a truck owner wants to know how to plan a journey for next 6 days in such a way that it maximises the revenue, the system will tell him the load to be taken, based on their preference, where they start from and the time of the year. The system tracks the trucks on the network and gives emerging traffic patterns, based on past, anonymous data.
As we draw this interview to a close, Mandal explains the 4TiGO vision again. Just in case, we hadn’t got it clearly yet. It is as much a logistics company as it is a technology firm. The founders want to keep enhancing the technology platform and the domain expertise in logistics, with the goal of sorting out every little kink in the goods transportation sector.
Snapshot: 4TiGO Network Logistics
Founders: Anjani Mandal and Vivek Malhotra
Year: 2015
City: Bengaluru
Funding: Accel Partners and Nandan Nilekani
In Brief: 4TiGO Network Logistics is designed as a technology platform that brings together fleet owners, truck drivers, transportation firms and companies that ship goods, into a common technology platform. But, that’s not all. The company’s partnerships with Federal Bank offer credit lines and banking services to transportation SMEs and its pact with Indian Oil helps the company offer fuel discounts, incentives and even a fuel card to truck drivers and other stakeholders.
