Introducing Loop: The Future of Logistics in Bangladesh and Beyond
Anchorless Bangladesh is an early stage venture investment fund focused on advancing the local startup ecosystem through access to global resources.
Bangladesh has the eighth largest population in the world: 165 million people living in an area the size of Iowa with an economy that’s been growing almost 10% a year nominally for the last decade. This growing consumer demand in a high-density market creates an industry worth over US$10 billion a year in truck freight alone.
At Anchorless Bangladesh, our goal is to identify early stage startups best-suited to take advantage of such large, unique opportunities in Bangladesh. Loop is a company on that exact mission, re-imagining the movement of commercial goods for next generation shippers and carriers. We are thrilled to announce a seed investment in Loop and look forward to working closely with this brilliant, passionate team in contributing to a better Bangladesh — and beyond.
The Starting Point
When we meet founders, we first try to understand their motivation and desire for doing what they do — and if the problem they’re trying to solve is something they’ve faced first-hand. In Loop’s case, co-founders Fahim Salam and Rajib Das both have experience: Fahim cut his teeth trading blankets via Alibaba which led him to discover the world of “broken freight.” Rajib, on the other hand, spent time at the Port of Vancouver and left with a desire to solve myriad inefficiencies — which multiplied tenfold when he came back home to Bangladesh to handle the supply chain aspect of his family’s business. But the team wasn’t complete until they brought in Chris Li, rounding out a trio that had collaborated together in some capacity for over 6 years. Chris built a clean, scalable tech back-end to execute their vision — and thus a company was born not for the sake of vanity but rather a need to tackle a large-scale local, regional and global problem.
The problem in question is a massive freight market operating without a centralized booking system, lacking transparency and tracking, with wasteful empty miles and without quality data to analyze and improve the ecosystem. Loop’s centralized platform provides an asset-light solution by digitizing the process for both shippers and carriers end-to-end, all while reducing freight costs and providing a better user experience.
Why It’s Working
So, how does Loop implement a digital solution in an industry notorious for doing things the old-fashioned way? With an innate understanding of their end users, Loop targets truck fleet owners as carriers rather than independent drivers, and they have secured business with both local and multinational corporations as shippers. By working closely with clients to transition users to digital, Loop has been able to successfully onboard new business at an accelerated pace. For instance, within a month, they were able to reduce the asset management cost of a feed mill client by 27% using reverse logistics. Consequently, they’ve already shown success with agriculture, ceramics and FMCG clientele.
Here’s how they’re making it happen:
- Pricing is agreed upon and honored. No wasteful negotiating.
- Logistics managers and suppliers no longer need to spend time on phone-heavy coordination with traditional transport brokers who may provide misinformation or put their own interests ahead of those of the client. Instead, in three clicks on Loop’s platform or with the help of a Loop account manager, shippers are directly connected with a national chain of vetted truckers.
- A long chain of calls for location updates is replaced with transparent digital shipment tracking.
- Truck owners can reduce deadhead costs, improve driver safety and transparency while getting paid faster.
- Business owners can avoid sinking assets into their own fleet of trucks — currently numbering 200,000 plus nationwide — that often sit idle.
- Shipping managers can utilize Loop’s enterprise software for real-time reporting, analytics and increased visibility — all contributing to better decision-making.
Loop is hyper-focused on executing according to the needs of its end-to-end users rather than pushing for solutions that require jarring behavioral changes. This approach has resulted in some of the best capital efficiency we’ve seen from any company in the country.
A key tenet in our investment philosophy is the potential to expand beyond Bangladesh. With the country being positioned strategically as a gateway between India and China, two of the world’s largest economies, Loop has the ability to harness local Bangladeshi talent and resources to naturally engage in cross-border operations.
“Loop Freight is all set to improve the Logistics Performance Index of all manufacturing and distribution heavy countries in Asia, starting with Bangladesh. We can make it happen by having a lean and data-driven approach to moving commercial goods.”
— Fahim Salam, Co-Founder
Expansion eastwards to Myanmar allows Loop to engage in the East-West Economic Corridor, ending up in Vietnam and into the Pacific. Westward, India awaits. Considering Bangladesh’s import/export volume (over US$104 billion in 2018 according to the World Bank), this is not only natural but inevitable.
The logistics industry is surely having a moment. Seattle-based Convoy, with its asset-light approach, is arguably Loop’s closest operational peer. In emerging markets, Kobo360 of Nigeria has demonstrated the ability to expand across borders. Yet, in the bigger scheme of things, the world still remains as fragmented and undigitized as ever. Even San Francisco-based Flexport (with US$1.3 billion raised) has barely scratched the surface in a market that generates trillions in transaction value every year. An industry as old as any, logistics is at the precipice of a global digital transformation — and the ongoing pandemic looks to serve as the driving catalyst in getting it over the edge.
For the Next Decade
As venture investors, we understand that our relationship with companies may last five years, even a decade. We also know that the money we invest today is just the beginning, with hopefully more rounds to come. Knowing this, we ask ourselves: “Do we want to work with these founders for that long?” and “Would we work for these founders ourselves?”
With Loop, the answer is a resounding yes to both.
At the end of the day, our belief at Anchorless is not only in Bangladesh, the country and its potential, but also in Bangladeshis, the people and their abilities — about how access to expertise and capital can empower them to build companies that solve global problems.
With Loop, the Bangladeshi star shines bright for the future of logistics.