4TiGO offers fleet owners 25% increase in earnings: Anjani Mandal

Backed by Accel Partners and Nandan Nilekani, Fortigo Network Logistics Pvt Ltd (4TiGO) is a two-year old (launched in September 2015) start-up positioned as fleet exchange offering a transparent platform for all the players in the ecosystem viz. the truck drivers, fleet owners, consignors, consignees to exchange information and conduct business transaction through an online medium. Anjani Mandal, chief executive officer and co-founder, 4TiGO, in conversation with Ashish K Tiwari, speaks about how the platform ensures existing resources in the industry are utilised to the fullest potential through the use of technology. Edited excerpts...

Is your business similar to Uber and Ola?

Ours is a business to business (b2b) offering that addresses the logistics space for factories / industries. Unlike the cab aggregators which is a simple two party transaction, 4TiGo is a multi-step and multi-party transaction. It is a complex flow and in order to make this work, we make sure that all of them are on the same platform. So typically, you have four parties viz. truck drivers, fleet owners, consignors and consignees who would be involved in a transaction. Then there are payments pertaining to this transaction that have to be controlled. We handle that as well because all payments that go through are via electronic channels. All payments for fuel, toll and en-route expenses for the drivers, including for emergency, is electronic and done through a card that is with the driver. Driver can withdraw money from any ATM for en-route expenses. A journey could be anywhere from 500 – 2,500 kilometers so there could be an emergency, the payments have to be instantaneous from anywhere and to anywhere. So our system handles all of that.

How does the fleet owner benefit from this system?

Lets say the fleet owner has a truck on which he has spent Rs 20 lakh. But that truck is occupied for only 20 or 18 days in a month. For this, he has to wait for two to three days and if he does four trips, he has lost seven to eight days in a month. Now if he were able to reduce that to one day through electronic means – by getting load visibility and instant electronic payments for advance, he can have the wheels turning at a much higher percentage of time. Our estimate is the fleet owner can easily get a 25% enhancement in his earnings. And that is on account of his efficiency and visibility of the loads and instant electronic payments wherever he is. We currently operate in the whole of South India, Mumbai, Ahmedabad, Indore, Delhi and Calcutta.

How long did it take for you to develop this platform?

The enhancements of the system continue till today. We started in December 2015 and June 2016 is when we launched in the private mode. The December 2016 is when we were able to release the network mode and went live in the period between December 2016 and January 2017. It is now integrated with Federal Bank, who also provides working capital loans for the small and marginal businessmen who are a very large number in this fragmented transport industry and with IOC for fuel being paid electronically. We have a subsidiary 4TiGO Network Xelpmoc - an independent organisation which provides technology services. Being the ideal platform for regulated businesses, it would have been great help to the Industry if the platform could have come out in September or October. It would have helped through with the difficulties on account of demonetization but it was not to be.

Is this platform available on web and mobile?

The platform has to have variants for everyone, based on the functionality. So everyone has their respective pieces. Everyone has to have a mobile platform. For an owner-driver, he sometimes will be driving by himself, or sometimes he may be in the office. So he will have a web and mobile version. The fleet owner, who may be larger, because he has to do a lot of bidding, be available around the clock, sometimes even in the middle of the night to remit money, is given both through the 4TiGO network.

The transporter of the transport company, has a similar need. He has a customer query, wherein he should be able to respond to that. But transporters also have to have a web platform for the 30-40 users who actually put the loads and decide on all these loads.

The consignor on the other hand, can do it on the web hence we have not provided a specific mobile platform for the consignor or the consignee. However, with any good mobile phone one can now access web content on the phone.

We now have released a version called Universal 4TiGO that can work on any device. It works on Chrome browser on any device with same level of control and functionality including anytime-anywhere remittances, status visibility etc.

You offer this on a subscription model? How is your arrangement with clients?

We have a very simple approach. It is on a percentage i.e. 2% of the transaction. Whether you are the transport company or the fleet owner. If you never really use it for any transaction at all, there is a certain minimum charge depending on how many users in the user company.

Fleet owners with benefits from anytime-anywhere-remittances for the entire fleet including discounts on fuel etc have to do at least one transaction, or pay a certain amount, which may be as low as Rs 350.

For a transport company that only posts loads, it is about Rs 3,000 per month. The reason being that average transaction value in long-distance (trucking) is about Rs 60,000. They use it once, that itself is Rs 1,200 and it is free for him for the full month. Rather than just checking the system for prices and paying me Rs 3,000, they can use it for transactions as the system is fully integrated with the bank, payments and technology.

How many users are currently on your exchange platform?

We have had several customers, around 500 trucks on the network, since beta stage. After we went live, the number has grown quickly. Fleet owners currently have over 6,500 trucks of which about 2,500 odd trucks are live on the network and we are in the process of on-boarding the balance.

Is the government machinery capable of handling such a system?

Having spent 30 years in technology and having seen the government policy changes and their ability to understand technology, you would be surprised how rapidly things can become good. I'm very bullish about the fact that GST will have hardly any glitches when it goes live. The system for RFID sensing of the truck is already live on 70% toll booths on national highways. If you have a sensor, which is working on one toll gate, why can't you have with the same specifications, another which is three miles later and with another government department? All these has been provided by one of the banks with NPCI as the mediator. There are three or four banks who are actively promoting these tags.

The technology now is fully installed in more than 500 locations and they are doing crores of transactions everyday. These systems are already present. The fact that it is operating and and looking at the knowledge and the depth of data analytics, which is deployed for tracing money-flow and tracing transactions within the government and financial infrastructure across platforms, it convinces me that things will take shape quickly. If the Central Government continues to encourage economic growth, eventually things will fall in place.

How are you going about covering other geographies in which you are not present currently?

The funding we got at the end of last year Dec 2016 is for network expansion throughout the country. We are yet to add Guwahati, Jaipur, Jharkhand, Bihar, Lucknow and Kanpur. We will also be extending to the north of Maharashtra, around Nagpur and Raipur completing the coverage of that belt with Indore and Bhopal. By the end of six months say around Durga Puja or Diwali, we should be in practically every important transport hub in the country. In fact, by around 2019-2020 we'll have at least 50,000 trucks on the network and we will be able to contribute in a big way to the entire road transportation industry.

Any views on what kind of revenues would you be doing once the presence is established?

It is very difficult in a start-up to predict what the revenues will be. But we are expecting that our break-even point will come within 2018 and our revenues will be enough to generate the margin to cover our expenses by then. Just to give you a sense of the opportunity, on an average on a long distance truck, they earn Rs 1.5 lakh to Rs 2 lakh of revenue and the kind of services we provide including anytime-anywhere remittance and so on, we expect that out of 1.5-2 lakh, a good 1-1.25 lakh money will be moving through our system. If we have, let's say, 10,000 active trucks by then, we expect that every month we'll be moving over Rs 100 crore per month.

Would you be raising more funds down the line?

For the current services, I don't think so. With the rapid changes and mushrooming growth of mobile computing and network, investment in technology devices for the end consumer is not required. We don't need to deploy more venture capital funding and we can always partner with banks, like we have partnered with Federal Bank, or other banks to arrange for short-term lending for our platform users.

We don't need to use venture capital money for deploying basic technology which is freely available given that we have built the technology that can work on every device. Our focus is on work like having voice activated systems and being able to activate by voice and give inputs back by voice in various languages. We do not need additional funds for these. However, when we do the same thing for LTL i.e. less than full truck load, say if end-user has to send out only three tonnes and we go down to serving requirement for 100 kilograms, then we may need more funding. So no funding required for FTL (full truck load) which we are doing now. But we will be requiring funding once we start doing LTL (less than truck-load).