GoGoVan eyes regional expansion

However, when the delivery vans failed to show up, they were left standing in the street with 200,000 lunchboxes and nowhere to go. The youngsters resorted to knocking on the windows of nearby vans in the blind hope of finding transportation.

This desperate experience prompted the idea for GoGoVan, currently a free-to-use app that puts customers in contact with drivers. Relying on GPS technology, the app notifies all drivers within 5 kilometers of a customer's pick-up point, and the first to respond gets the job. If there is no response within 10 seconds, another alert is sent out across a wider range. It is eminently preferable to the 20-30 minute waits typical of call center inquiries.

The Hong Kong-based start-up was founded in summer 2013 and more than 14,000 drivers have since signed up with GoGoVan, of which about 9,000 of them have been vetted and registered.

The company got off the ground with HK$20,000 ($2,600) in seed capital and received financial support from the local Cyberport Creative Micro Fund (CCMF) scheme and other investors. This year GoGoVan was named Best Mobile App at the Hong Kong ICT Awards. Last week the company received its first institutional round of funding - worth $6.5 million - led by Centurion Private Equity. It takes the total raised by the company past $10 million.

"They just provide us with the capital and let us have complete control in running the company. They trust us and they want to be passive. That's what we like about Centurion," says Steven Lam, CEO of GoGoVan.

Rapid expansion into Southeast Asia is GoGoVan's immediate goal and part of the new round of investment is being put towards expanding the team. The company has already tapped the Singaporean market, which is seen as a natural step from Hong Kong due to the two cities' geographical proximity and common languages. "The growth rate in Singapore is even faster than Hong Kong," says Lam.

The biggest challenge GoGoVan faces is keeping pace with rising demand for its services. At the same time, Lam recognizes the importance of educating customers about an app that represents a relatively new idea in Asia. For now, spreading the word is more important than making money - a commission system will be introduced once the business reaches maturity. Lam expects to charge drivers a 5-10% fee on all transactions.

Monetization is also expected to come through the recently launched GoGoFuel. The company partners with major local fuel supplies and buys up gasoline in bulk, selling it at a discount to drivers who use GoGoVan, while holding on to a small cut of each transaction.

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