The Indonesian freight and logistics sector has been stealing the spotlight this year, with many startups raising significant investment, signaling how the field is set to become the next big thing in the country’s digital economy.
One of the startups that snagged a sizable chunk of investment in 2019 is Ritase, a platform that provides a B2B digital transportation system that matches shippers with transporters, aiming to simplify the logistics supply chain and create a more efficient ground freight process.
Founded in 2018 by serial entrepreneur Iman Kusnadi and software architect David Samuel, the firm first raised USD 3 million in its seed funding round in September 2018 from Insignia Ventures Partners. In less than a year, the company bagged another USD 1.6 million in a corporate round in February 2019, and USD 8.5 million in a Series A round led by Golden Gate Ventures in May.
“The traction was good and the business grew quickly, so investors believed in the company’s potential,” co-founder and CEO Kusnadi told KrASIA in an interview.
Kusnadi has more than 15 years of experience working in the logistics industry, including in management positions for global logistics giants like DHL and APL Logistics. Ritase is the rebranded version of a previous company he had founded, named Trucktobee, he said.
Besides connecting enterprises with trucking vendors, Ritase also runs a software-as-a-service (SaaS) system for real-time transport management, digital order processing, route optimization, and load planning, which is used by both vendors and customers.
“Our main mission is to tackle freight and logistics’ biggest obstacle: data inaccuracy. The trucks usually operate without having clear data references, such as the types of cargo carried in the truck, or whether the drivers have appropriate licenses or not. Therefore, we build digital infrastructure to address these problems, so all stakeholders in the logistics ecosystem can benefit from our tech solutions,” Kusnadi said.
He believes that disruption in logistics will have a huge impact on the Indonesian economy. “For example, as our solutions can lower logistics costs for shippers, it could lead to price reduction for goods in the long run. And if the prices lower, it would eventually increase people’s purchasing power,” he added.
According to Kusnadi, business in logistics tech is promising. Ritase has been in operation for a little more than a year, and is showing positive development.
Today, the firm facilitates more than 40,000 shipments per month, and it has already worked with internationally renowned brands like Nestlé, Unilever, Japfa, Lotte, and others.
“We only had two shipper clients in the first quarter of 2018, but now we work with 74 big companies, including global FMCG and retail brands. We have also signed up 600 small and medium-sized transportation companies, with more than 11,000 individual trucks,” he said.
“The advantage of the B2B model is that [the business] is straightforward. We can get a good and fair margin as we deal directly with the truck owners without intermediaries,” Kusnadi said, adding that Ritase is already profitable.
The company has also signed a deal with the Indonesian Ministry of Transportation to digitalize weight scales across the country to alleviate truck overloading and over-dimensioned cargo. It also launched a “smart shelter” service in Surabaya earlier this year, which serves as a resting place for truck drivers. At the stopover, drivers are also given brief digital training, especially on how to utilize Ritase’s platform.
The firm operates an online marketplace platform called Ritase Shop (or Ritshop), which was launched in May 2019. It offers Ritase’s trucking partners accessibility to affordable auto parts and trucks. Kusnadi said that Ritshop shows the company’s commitment to supporting transporters, most of them being small and medium enterprises (SMEs).
“As we partner with many trucking companies, we know that it can be difficult for them to buy new fleets at competitive prices. Therefore, we collaborate with multi-financial companies that allow transporters to pay in installments. In addition, after purchasing a truck, they’ll automatically integrate with Ritase’s transport management system, which translates to added value for them,” said Kusnadi.
In October, Ritshop launched the largest used truck showroom in Greater Jakarta, letting potential buyers inspect a truck’s condition in person before taking the plunge.
Although working in a promising sector, companies developing new logistics tech also face many challenges, especially when it comes to licensing and regulations, according to Kusnadi.
“At the beginning, many thought that we were a logistics company, and therefore that we had to comply with the normal regulations for goods transportation, one of which is that we must have our own fleet. So I needed to continuously explain that we are a tech company that offers solutions for trucking logistics,” he said.
Kusnadi hopes that the government will push new regulations regarding this matter to accelerate the growth of the logistics tech sector.
Looking at the future of logistics in Indonesia, Kusnadi believes that there will be more digital players disrupting this space, which will make the race more exciting. “The more, the merrier. It indicates that the market is growing, and I believe that competition boosts innovation, which is good for the entire ecosystem,” said Kusnadi.
“I hope that Indonesia will implement an entire smart logistics process in the near future, and that we could solve cross-border logistics challenges to facilitate trade between countries more conveniently,” he continued.
Going forward, Ritase wants to strengthen its technology capabilities and add more services for its customers, to become the market leader in Indonesia’s trucking industry. The firm is also expanding its offerings by including hazardous waste management. By next year, Ritase also plans to offer inter-island container logistics services, as well as financing services to its partners.
Moreover, Ritase is currently in the process of raising new capital. It will be finalized “very soon,” Kusnadi said.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.
