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Digitizing Logistics Infrastructure – with Kargo Founder and CEO Tiger Fang

· The Boss Interview,Kargo,Sequoia,ZhenFund,Uber

*Podcast available via Spotify (here), Apple Podcasts (here), and more (search The Harbinger VC Podcast)

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Tiger Fang is cofounder and CEO at Kargo Technologies, a Jakarta-based startup that aims to digitize trucking and freight logistics in Indonesia before expanding to other markets in Southeast Asia. Kargo counts among its investors Sequoia Capital, ZhenFund, Intudo Ventures, ATM Capital, Coca-Cola, as well as Uber cofounder Travis Kalanick. Kargo recently raised $31m in its Series A led by Tenaya Capital. With Tiger, we cover his journey over the past decade, initially as Managing Director at Lazada Thailand before joining Uber to manage Western China and Indonesia as General Manager. We then examine Kargo’s solution, discuss how it incorporates into the logistics supply chain, how to develop route and pricing optimization, before shifting to competition and opportunity in the market, and the impact of China on Kargo and the broader SEA ecosystem.

Edited by Henry Gao;

Link to SoundCloud (here), also available via Apple Podcasts, Google Play, etc.

[Editor's note: this interview has been edited and condensed for clarity. The opinions expressed in this article are Tiger’s own and do not reflect the views of Kargo Technologies]



Tiger you’ve been in Southeast Asia for ten years and have seen much of the development since the early days. Could you first share with us a bit more about your experiences to date and you stories in Southeast Asia?

Tiger: I think the story goes back to 2008, best time ever to be in finance when I started my career in New York. I came to Southeast Asia on a backpacking trip and I really liked the vibe here and I met a few folks that were working for Rocket Internet. I connected with them and over the next couple of months I decided to interview for what they were trying to do: an Amazon clone here in Southeast Asia. So I came to Thailand with Lazada around 2010. I took some time to get comfortable with the idea of moving to a foreign country and doing a tech startup. I was supposed to be part of their Business Intelligence unit, since I’m pretty good with Excel and I had to use a lot of financial modeling for my previous job. When I got here, on the first day they told me to go to the outskirt of Bangkok because our logistics was broken and we needed to find and build a warehouse. So I spent the next 3 months on the outskirt of Bangkok helping to set up our first warehouse. I had known nothing about warehouse, [so] I bought some books like Delivering Happiness by Tony Hsieh from Zappos and read online about Amazon and really started from scratch. Back then, there wasn’t a lot of volume in e-commerce in general, so no one had an e-commerce fulfillment experience. We really had to build everything from scratch and I loved it. That was a really crazy 3 months of my life. We were doing a couple hundred orders a week and that was already completely overwhelming the logistics system in Thailand at the time. So we thought about renting our own trucks, we thought about doing last-mile delivery ourselves, and eventually Lazada would do that. They have this logistics express system that they are building. So that was the first story about coming out to Southeast Asia. I really loved that zero-to-one experience.

After Lazada I went to Uber. Uber had just fraise a big round from Google and was expanding out here in Asia. They had just launched in Singapore. Because I really love that zero-to-one experience, I signed up as a “launcher” where I met our mutual friend Alan (Alan Jiang, founder at Beam). We launched Malaysia, then I launched Thailand and ultimately Indonesia in my first year at Uber. So this is starting from scratch, going into a foreign country, figuring out what type of product to bring, the pricing, and ultimately hiring a team to start the first operation for Uber in a specific country. So that was really cool, and at that time China for Uber was still in a sleepy mode. We had just launched in “北上广深” (the four big cities: Shenzhen, Guangzhou, Beijing and Shanghai) without Uber Black product, which is the limousine, very luxury [service], think about Audi A6’s and Mercedes. And this is the time where China was really starting to think about its P2P, the classic ridesharing [model] that we know today. There was kind of a call to arms like “China is gonna be a big thing, if you speak Chinese, come back”. And so I did, partially because I have never worked in China. I was born there but I left when I was very little, and also I thought it was a great opportunity to learn how to speak Chinese. So I picked second tier cities in China where I knew that there weren’t going to be a lot of expats, where I really need to be able to use my Chinese.

So I started in Chongqing. Chongqing is a huge city actually, biggest city in the world by population. Officially that city has 30 million population. Then I launched a lot of cities around Shanghai, like Nanjing, Suzhou, Ningbo, and ultimately I ended up in Chengdu, looking after Uber in Chengdu as a city general manager and then as western region of Uber China before the merger. After the merger with Didi, there was a lot of action packed in that two years in China, I came back to Southeast Asia, because that’s where we thought was going to be the next fierce competition with both Gojek and Grab, and I would be able to take a lot of my learnings from China, especially against very strong well-capitalized local competitor and be able to execute that in a place like Indonesia. So I came back and, obviously, we sold our business to Grab, so I’d like to say I’m the only Uber manager that was sold twice, before finally starting my own venture Kargo here in Indonesia.


How Kargo Got Started

Thanks for sharing that context. It’s fascinating how much you’ve done over this ten years and, as you mentioned, essentially the beginning of the development of the Southeast Asia tech ecosystem. It’s also quite a coincidence and very interesting that you’ve worked at both Lazada and Uber, because in the U.S. there’s something called the “Paypal mafia”, which is a number of cofounders and executives who went on to build some incredible businesses. And I noticed for Uber, for example, there’s a number of talent that left to eventually start doing companies, whether it’s Alan at Beam, yourself at Kargo, and also Zhang Yanqi who eventually went to Ofo as COO and is currently working with Travis at CloudKitckens. So really fascinating development in this region. Shifting the focus to Kargo, could you tell us a bit more about what Kargo is? Or even before that, what got you to thinking about starting your own company and building something like Kargo?

Tiger: Absolutely. I think Kargo was really a result of being at the right place at the right time. I think a lot of it is for an entrepreneur. I’ve said that I worked in Uber China. We worked really hard and the result was, I think, a great outcome for both Didi and Uber, which is the eventual merger. And then I came back to Uber in Indonesia. We had a great team. We had almost 150 people who are run raiding a $100 million business in Indonesia against both Grab and Gojek. We had a hundred people but for size of our business, we were very efficient, the team was very tight-knit. We were eventually sold to Grab and we just didn’t feel that we were the masters of our own fate, or the masters of our own destiny if you will. So I think there was just that fire, that itch that you get. At the end of that merger, we still all liked each other working together. I think there was always a chip on our shoulders saying “had we done this ourselves…” or “had we gotten the resources and be able to lay out the strategy, there would’ve been a different conclusion”.

I think that was the genesis, then it was about finding an idea that we could work on. And it was pretty hard to think of something to do after Uber, because here you have great growth story of such a massive impact you’ve been making in a city and just the overall success. This is the fastest growing start-up ever. So it was really hard to figure out what do we want to spend our time doing. We went down a list. During the period between when we merged with Grab and when we finally started Kargo, it was about six months, I took this six months to visit places where I probably didn’t have the time [to visit]. I bought a motorcycle and rode up from Ho Chi Ming all the way to Hanoi. It took about ten days, it was amazing. I travelled to a couple of second tier cities in Indonesia and talked to folks about what it is like to live in a second tier city, I’ve never been there before. We thought about doing a cross-border e-commerce business. I actually bought a couple thousand dollars of watches because I thought we’re gonna white-label watches and import them from China to Indonesia to sell.

We looked at a lot of possibilities, and trucking was one. There were big successful companies in the U.S., India, China operating in this space, and there were none in Southeast Asia, in Indonesia. I spent time talking to big trucking owners, truck drivers. I went to a couple of distributors of fast-moving commodities and just asked questions like “Hey what are your problems? How do you book a truck?”. Those type of conversations end up painting a picture that Indonesia, first of all, is one of the biggest markets for logistics. It spends 25% of its annual GDP on logistics, which is about 200 billion dollars a year. There are seven million trucks sold in the last ten years and 90% of these trucks are owned by small fleets with less than ten trucks. So [the market is] super fragmented. Not an ounce of technology in its entire ecosystem. People call up their local brokers. There’s not a lot of transparency and quality of service. If you google “I want to rent a truck” you really don’t know where to go, so everybody relies on someone that knows someone in their networks. So what we found was that for the actual owner of the cargo to the driver, sometimes there can be as many as three layers of brokers, each taking a percentage or a cut. So we thought this is an interesting idea. It’s sort of related to what we’ve done at Uber, which is to build a two-sided marketplace. We gotta get these drivers trained to use our software. It’s not cars, but it’s bigger, it’s trucks, so there’s a lot of similarities. So we thought this was probably the best opportunity that really fit our profile and experience, and that was the start of Kargo. By the way, I’ll go into this later, but we were completely wrong. Truck hailing and car hailing are nothing alike, there’s actually a lot of difference.

It’s fascinating how large the logistics market is in Indonesia and how big of a portion of GDP it comprises. Could you tell us a bit more about this logistics market in terms of the supply chain and how Kargo fits in?

Tiger: Logistic is a huge space, and different industries touch on different parts of that supply chain. For example, when we think about importing and exporting, maybe a factory in Bandung that manufactures fabrics and exports it, there is picking it up from the factory, getting it onto a port and delivering it into a ship. That is one of the industry segments that we could potentially target. We took an overview look of the landscape and mapped out the players in last-mile, how much capital raised, and what is the standard business, and we knew that it was pretty hard to get into, especially as a startup that haven’t raised funding. So what we came out with is “who’s doing the mid-mile of the journey”, “who’s doing the line hauls, the intercity [trip] from manufacturing plant to distribution hub”. That landscape seem pretty uncompetitive. And also who is doing the first mile, from port pick-up, import and export, to some warehouses. That was pretty interesting as well.

So we looked at that, and we also looked at the fragmentation of the market that is currently servicing that segment. I think in order to build a valuable marketplace, you need to have extreme fragmentations on both ends, supply and demand. So we zeroed in on FMCG, because FMCG has a lot of volume, Indonesia has such a big consumer base. The large FMCGs of the world have demand for thousands of trucking engagements every single week. So that’s where we first started. We went to these big FMCG enterprises and we started servicing them, saying “hey do you need some trucking service”. And we went to a lot of trucking companies that we met and basically hooked them up without software, our app, and that’s really how Kargo started.


What Does Kargo Offer

Can you help us visualize the product given that it pertains both the supply side and the demand side? The truckers and transporters as well as the clients? That would be really helpful.

Tiger: I think the easiest way to visualize it is “Uber for big trucks”, and instead of to consumers, it’s to business. A lot of the features we developed were very much inspired by how we thought about Uber and ride hailing, and we were very much mistaken. I’ll start with describing the product that we offer to our customer, and then I’ll go on to differentiate car hailing and truck hailing.

We divide our market to two parts. There is the shipper – who are folks who need to move their goods, and transporters, folks and logistic companies that own trucks, because we don’t own trucks ourselves. And obviously from the transporters, there are the drivers who are the important third stakeholder in the ecosystem. What we offer to the transporters is an all-in-one app that allows them to see all the available jobs that we have on the Kargo platform, and there is a bidding system which they can say “I want to take this job at this price” or “I will bid and I will give you a price that I can take this job”. Once that bid is won, he is able to assign that job to the fleet of trucks that is registered to him. We target small to medium-sized trucking companies. The average size of a trucking company on our platform has about 10 trucks, and we think that is a good number because when servicing big enterprises you really need a lot of SLA to make sure that you can service these guys that have very high standards in timeliness.

So that’s the product on the supply side. On the demand side, we have a dashboard enterprise login system that allows the procurement team and the warehouse team in these companies to login and be able to book a truck. We try to provide 100% fulfillment when they book through our system and when there’s a booking, that booking is completely trackable in real time with our driver app. So that’s the only thing that gives it an Uber-ish feel. At the end of this, we will be responsible for all of the billing. This is the huge part that we never have to deal with at Uber, because we did everything in cash, with a credit card or any sort of digital wallet. Here we have to make sure that we gather all of the documents, and the documents have to be very pristine, need to be coupled with their invoices, and the invoicing is very specific to each enterprise-level customer, and we need to build an invoice to customer to get paid back in whatever terms of payment that we have struck with each enterprise customer.

Gotcha. Couple things to work through. First of all, you mentioned that there’s a couple of different stakeholders: your clients, the transporters and also the drivers themselves. Is there any reason why you work through the transporters versus the drivers directly which would seem to be a more Uber-type model?

Tiger: Great question. It really depends on the structure of ownership of the industry. In a place like Indonesia, a big container truck costs anywhere between 50 to 100 thousand dollars, depending if you want to buy it new or used. The drivers, a lot of the time, just don’t have the capital and credit to be able to purchase something like that. We see that with smaller trucks, trucks that do last-mile, maybe the driver is the owner. But that is actually one of the biggest difference between the markets, between China and the U.S. versus here, there is just not a lot of what we call “independent operators”, drivers who also own the trucks that are operating in the space. So when you start doing these really big and heavy equipment, we like to do these big “wing boxes”. They’re called wing box because the sides of their truck opens up like wings of a bird. We actually haven’t come across any truck of that size that was owned by the driver, so we choose to work with these small/medium-size trucking companies.

Makes sense. Just to get a better sense of the supply side of trucks, do you help equip the transporters and their trucks with any hardware or fleet management tools to help you run analytics?

Tiger: Yep. If they have these fleetmatics tools, we will integrate with them. We have APIs that are able to take a lot of that information, if that’s the information that one of our customers or shippers require, we can send that to them. But most of the time, these trucking companies have android phones, and I think that’s the biggest difference between starting Kargo in 2019 versus Uber in 2014, smartphone penetration in the past four years has skyrocketed in Indonesia and Southeast Asia. So these truckers have these $30-50 OPPO, Vivo, Xiaomi phones. They can download our software into their phones and the phone functions as a GPS tracking device, so we’ve been leaning into that. And the data we collect in real time gets back to our customers. But I think it’s really up to the customer. If someone requires that you need to have a state-of-the-art GPS system that’s linked to sensors on doors, making sure doors are on lock, because you have really high value commodities that you want to transport, that’s a requirement that we put into that order and we will only display this job to our trucking partners that have that requirement. This is really where technology comes in, instead of a guy calling all these trucks asking if they have this, it’s already marked [in our system]. These are features that are required and we just play match-maker between what’s out there in terms of available supply that can service this type of demand


Kargo’s Value Proposition

That makes sense. What do you do in terms of route or pricing optimization and how does that pertain to some of the stakeholders on your platform?

Tiger: Pricing is something I think about a lot, because this is one of the major difference between long-haul trucking versus Uber or even Lalamove in doing intra-city [delivery]. Doing intra-city is much easier to standardize, because you can have a per-kilometer volume-metric cost to operations, but in these long haul trucking, you’re going from a very desolate place, maybe a manufacturing plant to another city, but it could be kilometers away from the city center, in some other industrial area that you have to deliver to, not to count all of the different tolls, you might be going on a ferry…It’s very hard to standardize prices. This is again dealing with such a fragmented supply base. In Indonesia, on our system there are 20 different types of combinations between truck heads and trailers. The trailers can be flat beds, box, reefers, a ton of different things. And different items and different goods has to move in different boxes, and sometimes it could have a different box per head. To get proper pricing for all of this takes a lot of time and effort. Traditionally, a broker says “I only do this specific type of truck” and that’s how we started, but with technology, what we are able to do is when we broadcast all of these jobs onto our market place and when we get live bidding system, we are actually harvesting data on every type of goods being move in the entire country during different times (because seasonality also plays a big role) and in different truck types. So we harvest this data and we triangulate a price between what we think is the price to serve, what is the availability of supply on our platform that can serve this specific route today, and what historical prices has been, factoring in supply, demand and seasonality. So pricing is actually one of our secret sauce and the pricing algorithm that gets better over time is because we’re getting all of these data points feeding into the algorithm that builds a live route-by-route truck-by-truck price index of all freight in Indonesia.

It’s really helpful to understand that pricing mechanism and indexing system. Shifting the focus to the client’s side. From their perspective, why do they want to work with Kargo? What is the value proposition and differentiation that Kargo provides to them?

Tiger: Normally, a big enterprise has to work with a set of carriers or transporters that have served them over time. Because of how trucking works in Indonesia, enterprises can at most be able to work with a dozen trucking companies, because the process is very manual, they have to call them, they have to make sure that the truck is available, and they have these tender processes every couple of years or so. To be able to really open up their job to all the trucking companies out there is a really hard endeavor because (1) you don’t know them and you don’t know their service standards, safety and quality and (2) you just don’t have enough man power to call up every single truck company every single time. So for us, what we say to a vendor or a customer is: look, you have 10 trucking companies dedicated to you. As an example, let’s say Unilever has another 20 dedicated companies. Between the two of them, they have 30 trucking companies. But if you really mismatch their routes and put all of their demand on a map, a lot of times there could be a lot of overlaps. So really between the two of them, if we schedule it right, they probably only need 20 trucking partners between the two of them. That saves them cost. And if we’re able to get these 20 trucks to do more trips, more loads every single week, these truckers earn more money. So that’s at macro level what a platform like ours can do at scale.

We come in and say “Let us be a trucking partner for you. We have a whole market place. You test this out and see if we are up to par.” Normally, an enterprise customer will throw you their really bad routes that nobody wants, because it’s going to some tier 16 city and it’s really hard for them to get a trip back, so most of these transporters will reject them. We happily take it. We give them great service and we give them all of the features we talked about, and we do it with a smile, ear to ear. I think they liked that service and asked us to become more of their routine transporters. So they asked us to bid on some of their routes and we did. We were able to provide some real cost-savings to them. Again, the technology piece that digitizes the entire process. It takes a lot less effort to be working with us than with a traditional player. I think they really bought into that vision, but because of that working relationship we have with them, we ended up bringing Coca-Cola Amatil as a strategic investor into our last fundraise round.

So that’s a relationship we hope to have with many of our enterprise [customers]. The key thing is these enterprises are international by nature, so it’s very easy for any of these folks to say “hey you’ve done such a great job for us in Indonesia, can you proved some of the same service or technology to our operations in Vietnam, Thailand, Myanmar?” and that’s something we hope to do in the future.

I think the potential of a regional play is quite interesting and certainly to investors that want to help back large regional players. Getting back to your clients for a bit, we have a sense of who they are and how they work with you and the value there. What is your business model? How do you make money from them?

Tiger: I think in very simple terms, we match-make a client that needs a truck. If that truck load costs $100, we try to find someone that can fulfill it for $90. Our aim at scale is to take a roughly 10% take rate. It depends on the route and industry. It’s easier to take a 10% take rate from infrequent shipper than someone like Unilever that has thousands of volume every single day. It really depends on the mile, and the type of goods as well. A fast-moving CPG versus cigarettes have different margin profiles. On average, our platform tries to take a 10% take. That’s a beginning. Today we have ten thousand trucking companies registered on our platform. There is also a lot of need from these medium-size and small-size enterprises, so making us prove ourselves of value to these guys earns us the privilege to be able to sell ancillary services to them. If you look at what these trucking companies spend their money on, its things like financing of their trucks, it is toll of going onto all of these highways, it is gasoline, maintenance, tires etc. So these are the things that we hope to get to eventually, as we become bigger in scale and be able to bring almost all of these folks onto our platform, then there’s a real opportunity to be able to provide a lot of these value-added services to them.

That makes a lot of sense. I suppose with your access to the trucks on the supply side, you should probably be able to access some better rates on fuel and financing. So it seems like you have a direct relationship with clients. Given that, I wonder is it an opportunity down the road for you to build up your own fleet? In that case, you can have a better control of the margin profile.

Tiger: Great question. I think it’s something about what we think of ourselves as. We want to be a platform, we want to be an aggregator, and we want to be asset-light. I think that is the business model that we set ourselves down the path of. Will it be an opportunity for us to operate? Maybe, but I just don’t think that’s our core competence. If we want to be a global player, and I think our ambition is to be able to scale our operations team and technology into other markets, is owning trucks a better return on invested capital? I would first as that question. Secondly, I think there’s a lot that goes into operating a fleet in a place like Indonesia. We have to hire drivers and there’s maintenance of these trucks. These are just not our core competence and so we want to partner with folks for whom that’s their core competence. We want to be the technology layer, we want to be the value-added service layer, we want to be the marketplace, giving them jobs and we want to make sure their operation is more efficient through technology. I think that’s our core competence so I think we’re gonna stick to our core competence ground.


Competitive Landscape and Fundraise

Completely understand the focus and the doubling-down on your competitive advantages or capabilities. Could you share a bit more about the competitive landscape, broadly? We hear about companies such as Waresix in Indonesia. Could you talk us through how they’re positioned and what they might focus on versus Kargo?

Tiger: Absolutely. I think for me, this is a 200 billion dollar industry. All of the folks you mentioned are on the mission to digitize this, cut out the middleman and apply technology to this very antiquated industry. I think a lot of the times we are on the journey together. Between all of us, even if we add up all of our marketing numbers or how many trucks we have access to, and I think there’s some overlap there, it’s still less than a single percentage point, or one or two percentage point of the total amount of trucks out there in the market. I think there’s a lot of room for collaboration but also story sharing. I know most of the founders that you named. We are friendly in that there could be an association that’s created to make sure that we are helping to give guidance to governments about how to regulate this space, how to encourage innovation, but data-sharing as well between all these different platform. We really have a real time read on what the economy of Indonesia is producing and consuming, and where could be the next big infrastructure projects where we need to build roads because we see a lot of congestion at this specific point. I think there’s a lot of room for collaboration, and all of us are tackling very different chains [in the supply chain] and value proposition to clients. For example, we don’t do warehousing and today we are very focus on FMCG. But if someone else is focusing on agriculture projects, we are not going to be stepping on each other’s toes for a very long time. In every country that we mentioned, in China, in the U.S., in India, there are a few players trying to tackle this space, and I don’t think Indonesia is gonna be any different.

Well it certainly seems like we are in the earlier innings of this market development. I’ve also noticed that some of the players that we mentioned have raised relatively large amounts of funding, and also Kargo has as well, raised 30+ million dollars Series A recently, so big congratulations there! And in the midst of the coronavirus situation. Can you talk us through the fundraise and what it was like for you?

Tiger: I love to say that I saw it all coming and we planned our Series A raise directly because we had the timing of the virus down, but look, we’re just very lucky. We went out for our fundraise in Q4 and it was already a tough environment because there’s Wework and there’s a lot of jitter in the market, and we were able to close earlier this year. It was the right timing and we were very lucky and very fortunate, thank the stars for having the ability to have the strongest balance sheet in this category in the region. I think it’s gonna be much much harder in this time to go out and raise money. We’re acutely aware of that. For us, we gotta just use it wisely, so we’ve cut down our cost, we have cut salary from every employee, I’m not taking salary for next year. We’re putting it in a relief fund that we’re making for truckers on our platform, because we see that all of their volume is starting to come down. We’re very lucky that we’re functioning in a space that our business is still growing because we do a lot of consumer staples and no matter the quarantine or stay-at-home orders, people still need to eat, people still need to drink water. Those are the businesses that we’re still in. We’re still lucky to be able to work, and be able to work from home. But most of these drivers and a lot of folks on our operations team on the ground are not, they have to be out there on the frontlines, so I think the priority for us is just make sure that they’re taken care of, and we do everything we can to make sure that our drivers stay busy.


Southeast Asia as an Emerging Market

Congrats again on the fundraise. It’s very important to be in a good cash position in this period, so I’m very admirable to what you’ve been doing in terms of the relief fund and supporting a lot of the drivers and other folks in the community. So we’ve been talking about Kargo for quite a while. Thanks for talking us through all of the nitty-gritty details. It was super helpful. But just taking a step back and looking at Southeast Asia more broadly in terms of the startup ecosystem, capital flows and other developments. Given that you’ve been out there for many years and worked in a number of startups, could you share a bit more about what you’re seeing in terms of developments and opportunities there?

Tiger: Yeah, I think this is the most exciting part of the world. I’m betting my career on it. I moved to Indonesia full-time three years ago. I have a place here and my family is here. I think this is going to be the biggest growth-driver of the global economy going forward. Southeast Asia is just so dynamic, every country is different. When we think about regional expansion, we can’t just say whatever works in Indonesia is going to work somewhere else. We have to modularize every part of our product in our product offering and be able to say “perhaps this piece is what Thailand or Vietnam or Phillipines needs”. So we are very open-minded to that… that one product solution is not going to fit all, especially in logistics. Every logistics ecosystem is very different. But I think this is super exciting. A lot of macroeconomic issues about trade war and the rising of China really benefits this region. This is where labor is still relatively cheap compared to China. This is where there’s massive opportunity to upgrade the labor force of places like Indonesia in order to be more competitive in the global supply chain. And I think all of the governments in this region are really aligned towards that. They want to invest in their workforce and they want to attract foreign investments. In a place like Indonesia, I’m a foreigner but my cofounder is a local Indonesian. I feel like a trucking startup like this can really be successful in Indonesia. Indonesia is one of the few places in the world where the market is big enough and the market size is attractive enough for investors and it’s opening its arms to foreign talent like myself to be able to go found a company and to be able to thrive in an environment where it’s very competitive.

Shifting focus a little bit, I’d like to ask about some more question about the overall market, so not just Southeast Asia, but also China. It seems that there’s quite a bit of interest in Southeast Asia from Chinese founders, investors and alike, and also there’s quite a bit of influence in terms of business models being exported to emerging markets and regions. Given you experience in both China and Southeast Asian markets, could you talk us through how you feel about the Chinese market and what it means for your company and Southeast Asian ecosystem?

Tiger: I think the question you’re asking is quite complex. We’ve seen models where Lazada circa 2012 was coming in and saying “we want to be the Amazon and Zappos of Southeast Asia” and that’s completely changed. People that I talk to today, even our company, when we go out and talk to investors, first they say are like “are you like FTA (Manbang)” and I’m like “yeah!”. That’s interesting, right? Kind of recognize that Manbang over a convoy on Uber Freight. I think that just goes to show the amount of influence that these huge Chinese companies that have completely dominated their home market and can be a profit center to be able to fund other international expansion. I think that’s been a trend. We see a lot of people wanting to be the Little Red Book (Xiaohongshu) of Indonesia or tons of these Chinese counterparts that have been very successful because the Chinese consumer mobile-first, consumption-driven, brands-driven [preferences] really are what the Southeast Asia consumer can relate to and what investors and founders can relate to. So we definitely see that. Even for e-commerce, what Rocket ended up was supposed to be the Amazon version of Southeast Asia. It was acquired by Alibaba and they say this should be the Taobao or PinDuoDuo of Indonesia. Even India in this case. We get connected to a lot of portfolio companies from our investor Sequoia India, so there’s a lot of cross-border learning from them as well. We’re very grateful that we have some of the best Chinese early stage investors like Zhenfund and ATM Capital and they’ve been extremely helpful in trying to help us navigate who could be potential partners from China, who are the growth stage investors from China that are looking into logistics. That is definitely something we have a competitive advantage over the others in that I can speak Chinese, I’m very comfortable in telling our story here to Chinese investors and GP’s that are looking to expand abroad or invest overseas.

I definitely see that. In term of the dynamic between China and Southeast Asia, we probably could have another podcast on that. But for large scalable companies such as Kargo which has a large addressable market, investment and capital itself is a huge differentiator. It does seem that the Chinese investors are quite familiar with this model, given that some of the companies you mentioned, and with their funds typically getting bigger, they could become valuable sources of capital down the road. This is still really early stage, but even when I think about potential exits in Southeast Asia, which is of interest to GPs and their LPs, a typical question that’s asked is what are some companies that have gone public, what do exits look like? There’s a couple of IPO’s, a number of acquisitions. I think some of the large Chinese companies could be possible acquirers down the road, similar to what Alibaba did with Lazada, and I’m pretty sure there’s plenty of other examples as well.

Tiger: Absolutely. I think even Gojek and Grab, if you look at their cap tables, is almost like a proxy war between the giants. It’s been really interesting to be able to meet some of the entrepreneurs that are thinking through “who should I take money from” and if I do this, does it signal that I can’t take money from others. We’re just lucky that we’re still so small that we just got to focus on executing, but it’s definitely an interesting perspective. I think there’s been some reports on Facebook wanting to get into some of these e-commerce or payment-related activities. Obviously, it’s been a tussle between Tencent and Alibaba, but it will be interesting to see how Amazon or Google or Facebook comes and be able to compete on really neutral grounds. I think this is where the China vs U.S. technology giant story really come to live. Very bullish on this region!

Tiger, thank you so much for your time! I know we’ve talked for nearly an hour at this point. I really appreciate sharing your insights on Southeast Asia ecosystem and also telling us a bit more about Kargo!

Tiger: Absolutely, it’s been a pleasure Adam, thanks for having me!

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