Kobo360, a truck-hailing startup supported by Goldman Sachs, is working on a subscription-based fleet management software named HaulSight. This software allows businesses to monitor their vehicle fleets, plan routes, and access invoice discounts.
Launched this year, HaulSight presents an opportunity for Kobo360 to boost its revenue from current clients like manufacturers and FMCGs. Unlike Kobo360’s truck-hailing platform, HaulSight is a software solution that focuses solely on fleet management without involving truck sourcing, driver management, or cargo-related responsibilities during transit.
According to a source familiar with the company, businesses can independently verify and onboard their truck drivers using the app.
HaulSight’s introduction coincides with challenges faced by truck drivers in Kobo360’s network due to increasing fuel prices. This has led Kobo360 to reevaluate its commission structure to find a balance between drivers seeking higher fares and cargo owners aiming to maintain affordable pricing along the supply chain.
Kobo360 has decreased its commission over the years, from 20% in 2019 to 8% in 2021, showcasing the limited bargaining power of truck-hailing startups compared to their corporate clients. In contrast, taxi-hailing companies have raised their rates over time.
Fleet management software offers Kobo360 a new revenue stream from cargo owners and micro-fleet operators, bypassing the challenges of the aggregator model.
Established fleet management software providers are vying for a small pool of large clients, including prominent companies like Flour Mills, Dangote, and Tolaram.
Foreign fleet management software providers in the region charge $7-$50 per vehicle per month, while local providers charge ₦100,000-₦150,000 per vehicle, which may be affordable for large corporations but costly for small businesses.
Although selling software to large companies may involve long sales cycles, Kobo360’s extensive experience in the B2B logistics sector since 2017 gives it an edge through established relationships that could expedite the sales process for HaulSight.
Despite challenges in software sales to big corporations due to switching costs, Kobo360 is not the only logistics startup exploring alternatives. SendStack, for instance, shifted from the aggregator model to offering fleet management software to fleet owners on its last-mile delivery platform.
Another industry expert emphasized that software margins are appealing to venture capitalists and highlighted the importance of efficient truck management in addressing the complexities of the truck logistics industry.
With the launch of HaulSight, Kobo360 aims to maximize its current customer base, including micro-fleet owners within its network of over 50,000 trucks.
*Editor’s note: An earlier version of this story mentioned that Kobo360 had launched HaulSight. The product is still in development.