Why We Invested in OX Delivers: Reaching Small Businesses Across The Roughest Terrain
Purpose-built for the kind of rough dirt roads that defeat all but the toughest of vehicles, OX Delivers electric trucks — named by Time Magazine as “one of the best inventions in 2022” — offer on-demand logistics service for remote businesses in Rwanda. These vehicles, combined with a digital platform designed to work even on 2G feature phones, provide transport solutions for smallholder farmers and small-scale traders who otherwise struggle to get their goods to market.
Africa has long been reliant on imported end-of-life trucks from other markets. They are notoriously unreliable, expensive to maintain, and don’t usually perform well on rough terrain. The alternatives — bicycles, motorbikes, animals, or even people — can’t move enough goods or move them fast enough to make for a prosperous business. The result is low incomes, inefficient value chains, and food waste.
The simple, durable OX truck was created to overcome these challenges. It was originally conceived by a former Formula One engineer and commissioned by a non-profit called the Global Vehicle Trust, which launched Ox Delivers in 2020. The company has developed and improved its design since its launch, following a path of continuous improvement. OX employs a fully integrated model, renting space in their trucks to small business owners who cannot afford the upfront costs of purchasing their own vehicles. They then transport these goods to OX Delivers warehouses in rural and urban centers. Costs are kept low for the company and its customers; the trucks can be shipped flat-packed and are inexpensive to assemble in-country, and the electricity used to power them is 50% cheaper than diesel.
OX Delivers has also developed a digital platform to streamline logistics and customer interactions alongside their trucks and warehouses. It includes web and smartphone apps for dispatching, scheduling, and routing vehicles, as well as a USSD app accessible for the 80% of Rwandese who don’t use smartphones. This feature phone app enables customers to book shipments on a pay-as-you-go basis and facilitates cashless payments for each load shipped. It ensures that OX Delivers services are available to everybody.
With over half of roads across Africa still unpaved, farmers and small-scale business owners across the continent face similar challenges transporting their goods. Following its success in Rwanda, OX Delivers has the potential to expand its logistics services to other countries in the region.
Impact
In helping underserved rural farmers and traders get their goods to market, the service offered by OX Delivers combines economic growth with social and environmental impact. The company is helping overcome a crucial barrier to developing small businesses in emerging markets by providing affordable transport to people who cannot afford to own their vehicles.
OX Delivers began in 2020 with just two trucks in Western Rwanda; it now operates 20 vehicles and four warehouses, serving over 2,000 customers. Access to affordable transport helps the company’s customers and their communities grow their incomes and develop new business opportunities; this, in turn, should lead to increased demand for OX Delivers services as these businesses expand into new markets and rural commerce picks up.
Using electric vehicles, OX Delivers can keep these services affordable through cheaper fuel and lower maintenance costs. But the company is also contributing to the development of East Africa’s electric transport infrastructure, reducing overall emissions and spearheading the introduction of charging stations outside urban centers.
In the long run, improving transport links into rural areas, thus connecting them to the national economy, should create benefits on the national level. Generating revenue for local businesses should lead to more tax revenue, rural development, and, eventually, better roads.
“It’s about impacting the people who have been left behind,” explains OX Delivers Rwanda managing director Francine Uwamahoro. “OX is giving them power to grow economically.”
Smart Asset Financing™ with OX Delivers
Untapped has partnered with OX Delivers to finance electric trucks to add to their Rwanda fleet. According to Untapped’s Head of Investments Africa, David Kleiterp, “We are confident in the company’s impact and growth potential and believe it to be a good fit for our portfolio. The company’s business model is strongly driven by the assets (the trucks) and data.” David also notes, “The team is keen on using data to make strategic and operational decisions reminiscent of Untapped’s model. This alignment of mindsets makes the business a great fit for us. We believe the solution is replicable across Sub-Saharan Africa since the problem is similar across the markets; hence, we look forward to when, not if, OX will be able to scale,” he adds. Agriculture is the backbone of most economies in the region, and OX is well-positioned to directly impact lives and businesses in the sector.
Untapped’s investment strategy, Smart Asset Financing, finances tech-enabled assets that generate trackable data, thus helping to de-risk investments in emerging markets. This approach enables Untapped to make informed investment decisions while supporting impact-driven companies like OX Delivers that drive entrepreneurship and development.
Now on its second generation of fully-electric trucks, OX Delivers has partnered with automotive specialists at Dana, Iveco Group (Potenza), Coventry University, Penso, FLAGS technology, and De Montfort University to ensure their technology is ideally suited to their customers and to the environment in which they operate. The team is dedicated to constantly improving their vehicles and services, a strategy that should serve them well as they expand nationally and regionally.
About Untapped Global
Untapped is reshaping profitable investing in emerging markets. We offer data-driven investment opportunities for global investors to finance high-growth businesses across emerging markets. Our innovative Smart Asset Financing investment model tracks productive assets’ usage and revenue streams in real-time, offering investors transparent, secure, and profitable opportunities to invest and grow community wealth in emerging markets.
We provide asset financing for tech-enabled companies in emerging markets. For more information, reach out to our team at info@untapped-global.com
