Kobo360, a Goldman Sachs-backed truck-hailing startup, has introduced HaulSight, a new fleet management software designed to help companies track vehicles, plan routes, and access invoice discounting.
This subscription-based solution aims to drive new revenue from Kobo360’s clients, including large manufacturers and fast-moving consumer goods companies like Flour Mills, Dangote, and Unilever.
Unlike Kobo360’s traditional truck-hailing service, HaulSight is a pure software offering. It allows clients to manage their in-house fleets without the need for Kobo360’s trucks or drivers.
HaulSight launches as fuel prices squeeze the margins for truck drivers within Kobo360’s network, forcing the company to review its commission structure.
Kobo360’s commission rate has dropped from 20% in 2019 to 8% in 2021, due to intense pressure from corporate clients. “The bureaucracy it takes to renegotiate new prices with [corporate] cargo owners can go on for weeks,” says Alex Adenuga, CEO of logistics startup Movam. “And it only works out favorably if the truck aggregators have a close relationship with the cargo owners.”
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Software Offers New Revenue Stream Amid Competition
HaulSight offers Kobo360 an alternative to the complex truck-hailing market, where rising costs and shrinking commissions have put pressure on profitability.
Fleet management software gives cargo owners a new level of visibility into their operations, which could reduce operational costs. “The visibility provided by fleet management software can help companies save significant amounts of money,” says Adenuga.
Established fleet management providers are competing to serve Nigeria’s small pool of large clients. Foreign companies charge $7 to $50 per vehicle monthly, while local firms charge ₦100,000-₦150,000, affordable for large businesses but costly for smaller ones.
Kobo360 has an advantage in this market due to its established client relationships in B2B logistics since 2017, which could shorten its sales cycle. “It could take a year if you’re lucky,” Adenuga says, “If you haven’t run out of funding by then, it can be a challenging and frustrating process.”
However, switching costs could deter companies from adopting new software. “One popular manufacturer in Nigeria has been using Nova Truck for years,” he adds. “Switching to a different provider would be a painful transition for them.”
Exploring New Territory for Software Revenue
Kobo360 is not alone in its shift toward fleet management software. SendStack, a younger logistics startup, also pivoted from aggregation to fleet management software sales recently.
As Kobo360 taps into its network of over 50,000 trucks, HaulSight could serve as a critical tool for micro-fleet operators looking to increase efficiency. “Truck logistics is a chaotic industry,” said one B2B expert.
“There is a pain that efficient truck management can solve for [manufacturers and FMCG businesses] because those assets are very expensive [and these businesses want to make the most of them].”
HaulSight could bring new revenue opportunities for Kobo360 while addressing logistics challenges for its corporate clients.