Kargo Technologies Receives Investment from AirAsia Subsidiary, Provides Integrated Logistics Solution

Startups marketplace logistics Kargo Technologies gets funding in the form of convertible bonds (convertible notes) in an undisclosed amount from Teleport, the logistics subsidiary of the AirAsia Group (now known as Capital A). Funding will be used by Kargo to strengthen the supply integrated logistics solution.

The partnership between the two companies will combine Kargo's mid-range capabilities with Teleport's long-range expertise. In addition, it will open the opportunity to combine air connectivity with the capabilities of cargo trucks on the ground, utilizing strong technology and networks.

Kargo also claims that they can deliver goods of all sizes to more locations in Indonesia and Southeast Asia in less than 24 hours. "With this partnership, we will leverage Teleport's customer base and handle them based on our expertise," said Vice President of Cargo Operations Marselinus Erick in an official statement.

It is further explained, through this partnership that Kargo can fulfill services mid-mile on land. While Teleport will take care of the needs of air cargo and last mile. “This will enhance our offerings and increase fulfillment efficiency to our customers,” he continued.

Teleport CEO Pete Chareonwongsak said this collaboration was carried out to provide solutions to facilitate an integrated logistics ecosystem. He believes the two companies can provide positive results for the development of developing cities in Indonesia in particular and Southeast Asia in general.

“We understand that the fastest growing cities in the future will be middle class cities. We need to go beyond the network to connect these developing cities. The partnership with Kargo makes us ready to cross Southeast Asia,” he said.

Kargo Co-founder and CEO Tiger Fang added that the strategic partnership with Teleport will help Kargo become a multi-modal company and expand the value chain horizontally. "We hope that this partnership can be mutually beneficial to both parties by growing each other's presence in Southeast Asia by 2022 as we strive to solve the region's evergreen logistics problems," Fang said.

In Indonesia, the logistics sector is one of the sectors that has a large enough market share because it supports most of the daily activities of the community. It is proven from research conducted by Mordor intelligence stated that the share of the cargo and logistics market in Indonesia was worth $81,30 billion in 2020, and is expected to reach $138,04 billion by 2026.

Despite being hit by a pandemic situation recently, in fact the logistics sector was able to rise and continue to show its existence. Indonesian Logistics Association (ALI) noted that the flow of goods shipments grew by up to 40% during the Covid-19 pandemic. This increase was largely contributed by the pharmaceutical industry, medical devices and consumer goods (consumer goods).

CargoNexus

Currently, Kargo has more than 75 thousand fleets. A few months ago, Kargo launched CargoNexus, a SaaS solution for enterprises to implement precise monitoring and tracking for performance evaluation and analysis of their logistics operations.

KargoNexus' solution is a Transportation Management System (TMS), which is used to facilitate the process of planning the movement of goods, choosing routes, operators, as well as billing and payment. With this function, the need for fast, automatic, and efficient logistics can be met with certainty.

KargoNexus has a business model and monetization strategy hybrid subscription and cross-selling. As one of the platforms in the Kargo Technologies ecosystem, KargoNexus is considered to be ideal for businesses to get more value, both from fulfilling their needs trucking marketplace, as well as all the smart logistics and transportation features on KargoNexus.

Until now, Kargo Tech has served more than 13 thousand shipper throughout Indonesia. In general, their services are made to bring together shipper and vendors easily and quickly. In the past year, the main composition of clients from Kargo Tech was in the fields of FMCG, CPG, Manufacturing, Agri and Aquatech, Heavy Equipment, and Raw Materials industries.

"In 2022, Kargo Tech will continue to focus on developing the user base in key industries that it has successfully achieved in 2021, and also has a target to target the B2B market segment in other major vertical industries, such as Pharmaceutical, Automotive, and also General Goods," said Head of Product & Enterprise Solutions Cargo Brian Aditya Tedjasaputra.

Another target that Kargo wants to achieve in 2022 is intensive expansion to the islands of Sumatra, Bali and Sulawesi, as well as pursuing the growth of transactions and active users on its platform by double digits per quarter.