FourKites to focus on tracking biz for now, not truck aggregation: CEO Mathew Elenjickal
Mathew Joseph Elenjickal co-founded truck-tracking firm FourKites Inc. in 2014, along with schoolmate Arun Chandrasekaran. In February, the startup raised $35 million (Rs 228 crore) in a Series B round led by Silicon Valley-based venture capital firm August Capital.
The company employs half its workforce in India but has most of its 120 customers in the US, including Fortune 500 firms Conagra, Cargill, Nestlé, Mondelēz International and Caterpillar. In an interview with TechCircle, chief executive Elenjickal explains how his startup filled a gap in the US by translating trucking data into actionable insights for shippers. Excerpts:
Most of your business is in the US. Could you tell us about FourKites’ India operations?
Yes, around 90% of our customers are in the US. (Consumer goods company) Unilever wanted us to come to Europe and, hence, we have a small business there, too. We don’t deploy people in other markets as yet.
My co-founder and chief technology officer Arun Chandrasekaran runs the firm in India. Arun is a higher-secondary school friend and we graduated from Anna University College of Engineering together. I came to the US and worked with (IT services firm) Cognizant but we kept in touch.
The India office keeps on adding people and it might have around 70 now or even more. We have close to 160 employees in total. Most of them are in engineering and product divisions. We are also building an operations team and a QA (quality assurance) team.
How did you start FourKites?
I was working with an enterprise software company called i2 Technologies, later acquired by JDA Software, and then with (business software maker) Oracle. My work in both these companies was more to do with supply-chain software. I was interacting with big shippers like Nestlé, Procter & Gamble and Coca-Cola.
Trucking is a huge industry and a big pain point in the US. Once a truck leaves your plant or warehouse, you have no idea what is happening. If you are not using FourKites, it is still figured out using phone calls. We launched in late 2014.
The pain point we are addressing makes it efficient. When the truck shows up, they weren't expecting the truck. The dock is not ready and they are waiting for three hours. The forklift is not ready to unload. There is a lot of coordination required. People are always on the phone calling each other even today.
Haven't trucks in the US had global positioning system (GPS) for a long time now?
Yes, by law, every truck does have. But as a shipper, you work with hundreds of trucking companies and there is nobody who is aggregating the data from all these trucks and different trucking companies on one platform. The problem was the translation of real-time data into actionable insights for the shippers.
Surprisingly, no big IT companies were giving this as a product. (E-commerce giant) Amazon is putting a lot of pressure on trucking companies for real-time data. Maybe this was not a required technology five years ago. It is a new changing market reality. A combination of all that helped us crack the market.
How big is the addressable market in the US? Do you have any plans to launch your product in India?
In the US, it is a multi-billion-dollar-industry that tracks trucks. We are just getting started, maybe less than 2%. You can add various services on top of it, like analytics. It is a pure-play SaaS (software as a service) model and we have three-year contracts.
Our revenue is based on the number of trucks or loads or users. We even track the temperature of the trailers (unpowered vehicles pulled by truck or any other) and that is important for a lot of products that trucks carry.
We might, in the latter half of this year and even before that, focus on Europe. We had acquisition offers several times but we are in it for the long run.
Several Indian companies like Rivigo and Blackbuck have raised more money...
I am not so sure, but in India, it is bigger because they also kind of act as a logistics partner linking trucking companies with customers. We are not looking to do that right now.
There is a big commission business in that market but a different one for us. For that, we need to be an aggregator for supply and demand. It is possible in the future, but we would like to focus on tracking and get as much market as possible right now.
How is technology changing the logistics industry?
It all started with the ease of building a company. Then it is the adoption of hardware devices that became cheaper. Because of both these factors, now there is data and also there are tools to aggregate and interpret data and make sense of it.
The rise of e-commerce that helps customers track their orders is demanding a solution like this. Logistics is an essential support function for a lot of these new-generation companies.
How far are you from being profitable?
I cannot reveal much about it. We are re-investing and growing at 400% within a few months. Look at (ride-hailing firm) Uber, they are still losing money. We are looking to build market share now.
Our competitors are actually products of larger companies and we are the only real independent player. We get that advantage while building a network. We are looking for good companies to acquire and when a right opportunity comes, we will do that.