Deal focus: LocoNav targets gap in fleet digitization

India-based fleet management software provider LocoNav estimates that more than 200 million commercial vehicle owners and drivers in global emerging markets don’t have easy access to technology. In the age of tech-oriented taxi companies the likes of Uber, Didi, Grab, and Gojek, this will not do.

The ride-hailing phenomenon doesn’t directly play into LocoNav’s positioning and go-to-market strategy, but it does expose a counterintuitive lack of sophistication in an industry increasingly dominated by super apps and digitally minded logistics aggregators. Even if fleets, as we know them, are disappearing, drivers and their vehicles are still putting in long hours on the road with inefficiently fragmented technical support.

“LocoNav can be used by fleet owners that operate independently as well as those that offer their vehicle supply to third-party transporters,” says Shubhankar Bhattacharya, a general partner at Germany-based VC firm Foudamental. “We see this is an enormous market that represents a white-space opportunity given how much of it remains unsolved and devoid of competition.”

LocoNav has raised $37 million for its Series B round from a group of international investors, including Foundamental, Sequoia Capital India, and UK-based Anthemis Group and RIT Capital Partners. US counterparts Quiet Capital, Uncorrelated Ventures, and Village Global also participated.

Several high-profile individual investors are in the mix as well, among them former executives of Google, Snapdeal, and Facebook. They were joined by Ajay Agarwal, a partner at Bain Capital Ventures, and Manik Gupta, formerly chief product officer at Uber.

Part of the plan is geographic expansion; LocoNav is currently active in about 25 countries. But most of the capital is expected to be used building out the technology and data science teams in San Francisco, Gurgaon, and Bangalore.

R&D-wise, their focus for the next two years will be the creation of products that can reduce the costs of running a fleet by up to 50% with a positive impact on climate sustainability. The starting point is a suite of Loco-branded platform services that aim to create a one-stop-shop for fleet and vehicle management.

For example, LocoDrive, a virtual driver control center aims to keep fleet owners in sync with their drivers, while LocoADAS, a video telematics tool helps improve driver safety through on-board diagnostics. There is also LocoPay, which eliminates the need for petty cash at toll booths, and LocoRTO, which allows fleet managers to automate compliance management.

“What we found most distinctive about LocoNav is that it offers a full-stack digital services ecosystem for commercial fleet owners, cutting across fleet management, financial products, and other value-added services,” says Bhattacharya.

“Given that fleet owners in emerging markets account for over $3 trillion in annual spend, nearly all of it undigitized and highly fragmented, we are still only scratching the surface in terms of market penetration.”

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• Topics
• South Asia
• Early-stage
• Support services
• Technology
• India
• Transportation
• Foundamental
• Sequoia Capital