Truck Lagbe, a digital trucking platform in Bangladesh, raised a $4 million Series A financing round led by International Finance Corporation (IFC), and co-led by IDLC Venture Capital Fund I.
Other participants in the round included Millville Opportunities Master Fund, Shorooq Partners, Colopl Next, and TRU Fund I.
Sources said the new investment will be used to train drivers, develop technology and expand the service across the country.
According to sources in IFC, Truck Lagbe has played an important role in the supply chain to provide food and essential items during Covid-19. Its services are helping to sustain small and medium-sized enterprises (SMEs) and are also supporting livelihoods in the pandemic.
IFC evaluated all the initiatives of Truck Lagbe before investing in the company.
The multi-national lender said IFC is providing an equity investment in the company, which connects people and corporate customers with truck owners and drivers through an app and a website. Truck Lagbe is used to book short-haul and long-haul freight trips, with trucks of different sizes.
"We are thrilled to have IFC lead our Series A," says Truck Lagbe CEO and founder Anayet Rashid. "IFC have backed several of the leading trucking platforms globally, bringing deep knowledge, expertise, and network. They are the ideal partner for our next phase of growth."
"One of our big challenges is to train drivers. We will also use this investment in technology development," Anayet Rashid told The Business Standard when asked about the new investment.
"Cities have so far been our focus. We will now begin work to spread it widely across the country."
The home-grown platform has already registered around 40,000 vehicles, ranging from small pickup vans to large lorries. It received good responses from an increasing number of individual customers, while more than 5,000 businesses are now taking services offered by Truck Lagbe, said CEO Anayet Rashid.
A total of 80,000 people, including drivers, owners, and customers, have now registered with the app.
Anayet Rashid said competition is created among drivers when a customer wants to rent a truck. The fare determined by the competition is at least 17% lower than the traditional truck fare.
According to sources, 4.25 lakh small and large trucks registered by the Bangladesh Road Transport Authority are operating across the country.
The Hong Kong-based early-stage venture capital firms – Mount Parker Ventures and Aria Group – provided Truck Lagbe with the key portion of $1.75 million in seed investments.
Mount Parker is the investor of Asia's first app-based goods delivery platform GoGoVan, which has already extended its services to over 300 cities and registered 80 lakh drivers under its network.
Aria Group's portfolio includes on-demand-same-day-delivery-service-platform LaLaMove, which has expanded into two dozen markets across Asia and America, including the United States of America.
The concept of Truck Lagbe won a competition organised by the government in 2017. Two Bangladeshi school friends – Anayet Rashid and Mir Hossain Ekram – founded the startup in the same year to offer the first-ever app-based truck hiring services.
Truck Lagbe gained increased popularity after winning the Bangladesh Brand Forum Best Technology Innovation Award in 2018. It first launched services for individual clients for shifting homes within the city and nationwide, and later began to provide enterprise solutions.
Currently, Truck Kothay and Shohoz Truck are competing with Truck Lagbe.